Pieridae Energy Limited (“Pieridae” or the “Company”) (TSX:
PEA) is pleased to announce that it is offering
rights (the “
Rights Offering”) to eligible holders
of its common shares (the “
Common Shares”) of
record at the close of business on September 9, 2024 (the
“
Record Date”).
Pursuant to the Rights Offering, each holder of
Common Shares resident in a province or territory in Canada (the
“Eligible Jurisdictions”) will receive one right
(a “Right”) for each one Common Share held. Each
Right will entitle the holder to subscribe for 0.71286 of a Common
Share (the “Basic Subscription Privilege”). As a
result, holders of Common Shares may exercise 1.4028 Rights and pay
$0.2448 per share (the “Subscription Price”) to
acquire one Common Share. The Subscription Price represents a
discount of 25% to the 5-day volume weighted average trading price
of the Common Shares on the Toronto Stock Exchange (the
“TSX”) prior to the date hereof, the discount
applied to meet the requirements of the TSX.
Pieridae expects to raise gross proceeds of up
to $30 million from the Rights Offering and intends to use the
proceeds to repay indebtedness, for working capital and general
corporate purposes and to fund certain value-accretive optimization
projects. The expected closing date of the Rights Offering is
October 7, 2024.
The Rights issued under the Rights Offering will
expire at 3:00 p.m. MDT on October 2, 2024 (the “Expiry
Date”), after which time unexercised Rights will be void
and of no value. The Rights Offering includes an additional
subscription privilege under which eligible holders of Rights who
fully exercise their Basic Subscription Privilege will be entitled
to subscribe for additional available Common Shares on a pro rata
basis that are not otherwise subscribed for under the Basic
Subscription Privilege.
In connection with the Rights Offering, the
Company has entered into a standby purchase agreement (the
“Standby Purchase Agreement”) with Alberta
Investment Management Corporation (“AIMCo”), which
has agreed, subject to the satisfaction of certain conditions, to
fully exercise its Basic Subscription Privilege to purchase
24,498,749 Common Shares and to purchase up to an additional
77,625,434 Common Shares not otherwise subscribed for under the
Rights Offering (the “Standby Commitment”), which
will ensure that the Company receives gross proceeds under the
Rights Offering of at least $25 million. If the Standby Commitment
is utilized in full and no other Pieridae shareholders exercise
Rights, AIMCo will own approximately 49.81% of the issued and
outstanding Common Shares on completion of the Rights Offering.
Completion of the Rights Offering is subject to the satisfaction or
waiver of the conditions under the Standby Purchase Agreement.
Darcy Reding, President and CEO commented, “We
are extremely pleased to provide our shareholders with the
opportunity to directly participate in Pieridae’s future through a
backstopped rights offering. The ongoing support of our valued
shareholders, particularly AIMCo which is committing up to $25
million, is instrumental in accelerating our strategic execution.
Investing in value-enhancing well optimization, facility
consolidation and debottlenecking projects is expected to improve
revenue, lower costs and increase processing capacity to meet
growing third-party demand at our processing facilities.”
On closing of the Rights Offering, Pieridae will
enter into an investor rights agreement (the “Investor
Rights Agreement”) and a registration rights agreement
(the “Registration Rights Agreement”) with AIMCo.
The Investor Rights Agreement will grant AIMCo certain board
nomination and observer rights, and the Registration Rights
Agreement will grant AIMCo certain distribution and registration
rights, in each case as mutually agreed by Pieridae and AIMCo. The
Investor Rights Agreement and Registration Rights Agreement will
each terminate at such time that AIMCo and its affiliates together
hold less than 10% of the Common Shares.
Copies of the Standby Purchase Agreement,
Investor Rights Agreement, and Registration Rights Agreement will
be filed under Pieridae’s profile on SEDAR+ at
www.sedarplus.ca.
There are currently 171,911,336 Common Shares
outstanding. An aggregate of 171,911,336 Rights are expected to be
issued to subscribe for up to 122,549,019 Common Shares pursuant to
the Rights Offering. The final number of Rights to be issued will
depend on the actual number of issued and outstanding Common Shares
on the Record Date. Following completion of the Rights Offering and
assuming the exercise of all Rights, Pieridae expects that there
will be approximately 294,460,355 Common Shares outstanding.
No fractional Common Shares will be issued and,
where the exercise of Rights would otherwise entitle the holder of
Rights to fractional Common Shares, the holder’s entitlement will
be reduced to the next lowest whole number of Common Shares. No
cash or other consideration will be paid in lieu thereof.
The Rights will be listed for trading on the TSX
under the symbol “PEA.RT” commencing on September
9, 2024 and will be de-listed from the TSX at 10:00 a.m. MDT on the
Expiry Date.
The Rights Offering will be conducted only in
the Eligible Jurisdictions. Accordingly, and subject to the
detailed provisions of Pieridae’s Rights Offering circular (the
“Circular”), Rights will not be delivered to, nor
will they be exercisable by, persons resident outside of the
Eligible Jurisdictions (“Ineligible Holders”),
unless an Ineligible Holder satisfies Pieridae that their
participation in the Rights Offering is lawful and in compliance
with all applicable securities and other legislation, in which case
Pieridae may direct the depositary and subscription agent, Odyssey
Trust Company (“Odyssey”), to issue Rights to such
Ineligible Holder who will no longer be an Ineligible Holder. After
3:00 p.m. MDT on September 22, 2024 (10 days prior to the Expiry
Date), any Rights still held by Odyssey on behalf of Ineligible
Holders may be sold on their behalf by Odyssey.
Details of the Rights Offering are set out in
Pieridae’s Rights Offering notice (the “Notice”)
and Circular, which will be available under Pieridae’s profile on
SEDAR+ at www.sedarplus.ca. It is expected that the Notice, a
direct registration system advice representing the Rights (the
“DRS Advice”) and a subscription form (the
“Subscription Form”) will be mailed to each
registered shareholder of the Company resident in the Eligible
Jurisdictions as at the Record Date. Registered shareholders who
wish to exercise their Rights must deliver the DRS Advice, together
with the completed Subscription Form and the applicable funds, to
Odyssey at or before 3:00 p.m. MDT on the Expiry Date. Shareholders
who hold their Common Shares through an intermediary, such as a
bank, trust company, securities dealer, or broker, are expected to
receive materials and instructions from their intermediary.
The Rights and the Common Shares issuable upon
exercise of the Rights have not been, and will not be, registered
under the United States Securities Act of 1933, as amended and,
accordingly, the Rights and the Common Shares are not being
publicly offered for sale in the “United States” or to “U.S.
persons” (as such terms are defined in Regulation S under the
United States Securities Act of 1933, as amended). This press
release does not constitute an offer to sell or the solicitation of
an offer to buy the securities in any jurisdiction. There shall be
no sale of the securities in any jurisdiction in which an offer to
sell, a solicitation of an offer to buy, or a sale would be
unlawful.
ADVISORS
Peters & Co. Limited is acting as exclusive
financial advisor to Pieridae with respect to the Rights Offering.
Norton Rose Fulbright Canada LLP is acting as Pieridae’s legal
advisor.
ABOUT PIERIDAE
Pieridae is a Canadian energy company
headquartered in Calgary, Alberta. The Company is a significant
upstream producer and midstream custom processor of natural gas,
natural gas liquids, condensate, and sulphur from the Canadian
Foothills and adjacent areas in Alberta and in northeast British
Columbia. Pieridae’s vision is to provide responsible, affordable
natural gas and derived products to meet society’s energy security
needs. Pieridae’s Common Shares trade on the TSX under the symbol
“PEA”.
For further information, visit
www.pieridaeenergy.com, or please contact:
Darcy
Reding, President & Chief Executive Officer |
Adam
Gray, Chief Financial Officer |
Telephone: (403) 261-5900 |
Telephone: (403) 261-5900 |
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Investor Relations |
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investors@pieridaeenergy.com |
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Forward-Looking Statements
Certain of the statements contained herein may
constitute “forward-looking statements” or “forward-looking
information” within the meaning of applicable securities laws
(collectively “forward-looking statements”). Words such as “may”,
“will”, “should”, “could”, “would”, “intends”, “expects”,
“anticipates”, “assumes”, “increase”, “reduce”, “accelerate”,
“growing”, “condition”, “completion”, “vision”, “project”,
“future”, “strategy”, “proposition”, “ongoing” and other similar
words and expressions may be used to identify the forward-looking
statements contained herein. These statements reflect management’s
current beliefs and are based on information currently available to
management. Forward-looking statements contained herein include,
without limitation: expected gross proceeds under the Rights
Offering; intended use of proceeds from the Rights Offering;
anticipated benefits of the Rights Offering, including, but not
limited to, accelerating the Company’s strategic execution,
improving revenue, lowering costs and increasing processing
capacity to meet third-party demands; expectations with respect to
ongoing support from the Company’s shareholders, including AIMCo;
anticipated shareholder participation in the Rights Offering;
expectations with respect to the Standby Purchase Agreement,
including satisfaction of closing conditions thereunder; fulfilment
of the Standby Commitment and AIMCo’s ownership position following
completion of the Rights Offering; expectations with respect to
entering into the Investor Rights Agreement and the Registration
Rights Agreement; the anticipated number of Rights to be issued
under the Rights Offering and number of Common Shares that will be
outstanding following completion of the Rights Offering;
expectations with respect to the closing of the Rights Offering,
including timing thereof; expectations with respect to mailing the
Notice, a DRS Advice and a Subscription Form to each registered
shareholder of the Company resident in the Eligible Jurisdictions
as of the Record Date; expectations with respect to participation
of Ineligible Holders in the Rights Offering, including the
Company’s decision to allow any Ineligible Holder to participate;
and the Company’s vision to provide responsible, affordable natural
gas and derived products.
Forward-looking statements involve significant
risk and uncertainties. A number of factors could cause actual
results to differ materially from the results discussed in the
forward-looking statements including, but not limited to, the risks
associated with oil and gas exploration, development, exploitation,
production, processing, marketing and transportation, loss of
markets, volatility of commodity prices, currency fluctuations,
imprecision of resources estimates, environmental risks,
competition from other producers, incorrect assessment of the value
of acquisitions, failure to realize the anticipated benefits of
acquisitions, delays resulting from or inability to obtain required
regulatory approvals, and ability to access sufficient capital from
internal and external sources. These and other risk factors are
discussed in more detail under “Risk Factors” and elsewhere in
Pieridae’s Annual Information Form for the year ended December 31,
2023 and under “Risk Factors” in the Circular, copies of which are
available on the Company’s profile on SEDAR+ at www.sedarplus.ca.
Additional risk factors include, but are not limited to: the Rights
Offering may not be completed, or may not be completed on the terms
and timeline as currently expected, including with respect to the
Standby Commitment.
Forward-looking statements are based on a number
of factors and assumptions which have been used to develop such
forward-looking statements, but which may prove to be incorrect.
Although Pieridae believes that the expectations reflected in such
forward-looking statements are reasonable, undue reliance should
not be placed on forward-looking statements because Pieridae can
give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be
identified in this document, assumptions have been made regarding,
among other things: the impact of increasing competition; the
general stability of the economic and political environment in
which Pieridae operates; the ability of Pieridae to obtain and
retain qualified staff, equipment and services in a timely and cost
efficient manner; the ability of the operator of the projects which
Pieridae has an interest in to operate the field in a safe,
efficient and effective manner; the ability of Pieridae to obtain
financing on acceptable terms; the ability to replace and expand
oil and natural gas resources through acquisition, development and
exploration; the timing and costs of pipeline, storage and facility
construction and expansion and the ability of Pieridae to secure
adequate product transportation; future oil and natural gas prices;
currency, exchange and interest rates; the regulatory framework
regarding royalties, taxes and environmental matters in the
jurisdictions in which Pieridae operates; timing and amount of
capital expenditures; future sources of funding; production levels;
weather conditions; success of exploration and development
activities; access to gathering, processing and pipeline systems;
advancing technologies; and the ability of Pieridae to successfully
market its oil and natural gas products.
Readers are cautioned that the foregoing list of
assumptions and risk factors is not exhaustive. Additional
information on these and other factors that could affect Pieridae’s
operations and financial results are included in reports on file
with Canadian securities regulatory authorities and may be accessed
through the SEDAR+ website (www.sedarplus.ca), and at Pieridae’s
website (www.pieridaeenergy.com).
Although the forward-looking statements
contained herein are based upon what management believes to be
reasonable assumptions, management cannot assure that actual
results will be consistent with these forward-looking statements.
Investors should not place undue reliance on forward-looking
statements. These forward-looking statements are made as of the
date hereof and Pieridae assumes no obligation to update or review
them to reflect new events or circumstances except as required by
applicable securities laws.
Forward-looking statements contained herein
concerning the oil and gas industry and Pieridae’s general
expectations concerning this industry are based on estimates
prepared by management using data from publicly available industry
sources as well as from reserve reports, market research and
industry analysis and on assumptions based on data and knowledge of
this industry which Pieridae believes to be reasonable. However,
this data is inherently imprecise, although generally indicative of
relative market positions, market shares and performance
characteristics. While Pieridae is not aware of any misstatements
regarding any industry data presented herein, the industry involves
risks and uncertainties and is subject to change based on various
factors.
Neither TSX nor its Regulation Services
Provider (as that term is defined in policies of the TSX) accepts
responsibility for the adequacy or accuracy of this
release.