The Public Offering is being conducted alongside a Convertible Loan (as defined herein) for aggregate gross proceeds of approximately
The Financing consists of: the underwritten Public Offering of 60,910,000 Equity Subscription Receipts at a price of
a convertible loan in the principal amount of
The Financing is anchored by a strategic investor (the 'Strategic Investor') participating for an aggregate of
Financing Details
The Company has entered into a letter of intent and the Company intends to enter into a loan agreement prior to the closing of the Acquisition in connection with the Convertible Loan pursuant to which the Strategic Investor will agree to advance
The Convertible Loan shall bear interest at a rate of 14.75% per annum from the date of issue, accrued daily and payable monthly in cash. The principal amount of the Convertible Loan shall be convertible, for no additional consideration, into Common Shares at the option of the holder at any time prior to the close of business on the third business day preceding the date that is 60 months from the date following the satisfaction or waiver of the Escrow Release Conditions (the 'Maturity Date') at a conversion price equal to
The Convertible Loan will be subordinated in right of payment of principal and interest to all senior obligations of the Company. The Convertible Loan will be secured by a general charge over the Company's assets. The outstanding principal amount of the Convertible Loan will be repaid in full on the Maturity Date in cash. On and following the date that is the second anniversary of the satisfaction of the Escrow Release Conditions, the Company shall have the right to partially or fully repay the outstanding principal amount of the Convertible Loan in cash at a premium of 14.75% to the outstanding principal amount at the time of repayment, plus any unpaid accrued interest, by giving 30-days written notice to the Strategic Investor.
The Company intends to use the net proceeds from the Financing to finance the Acquisition of all of the issued and outstanding shares of MOPL pursuant the terms of the SPA, including (i) drilling activities in 2023 to ramp up oil production focused on the Tungkal PSC; (ii) execution work associated with the Tungkal PSC gas monetization tie-in project and (iii) partial repayment of certain debts of MOPL outstanding following the Acquisition, and development of MOPL's assets and for general corporate and working capital purposes.
If (i) the Escrow Release Conditions are not satisfied or waived on or prior to
The Equity Subscription Receipts were offered by way of a short form prospectus filed in each of the provinces of
Certain directors and officers of the Company participated in the Public Offering under applicable securities laws. Insider participation in the Public Offering constituted a 'related party transaction' within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ('MI 61-101'), for which the Company was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) thereof, as neither the fair market value (as determined under MI 61-101) of the securities issued to insiders under the Public Offering nor the consideration paid by insiders exceeded 25% of the Company's market capitalization, all as determined under MI 61-101. The Company did not file a material change report 21 days before closing of the Public Offering as the details of the insider participation were not known at that time.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of securities in
The Acquisition is subject to Criterium receiving TSXV approval for the Acquisition. The Financing and Acquisition constitute a Reverse Takeover ('RTO') under
As part of this development, the definitive agreement setting out the terms of the Acquisition was amended by way of an amended sale and purchase agreement dated
About
Contact:
Chief Executive Officer
Email: info@criteriumenergy.com
Chief Operating Officer
Email: info@criteriumenergy.com
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain forward-looking information and statements that are based on expectations, estimates, projections and interpretations as at the date of this news release. The use of any of the words 'expect', 'anticipate', 'continue', 'estimate', 'may', 'will', 'project', 'should', 'believe', 'plans', 'intends', 'seek', 'aims' and similar expressions are intended to identify forward-looking information or statements.
This press release contains statements of forward looking information including, without limitation, statements with respect the issuance of the Convertible Loan, approval of the Financing and the Convertible Loan by regulatory authorities, intended use of net proceeds of the Financing and the Convertible Loan, generation of stated net operating income by the Company for the second half of 2023, the stated significant upsize potential of the MOPL assets, the intention to drill 3-4 wells in Q4 2023 and commence an annual drilling program in 2024 in the Mengoepeh Field, the increase of recovery from simple faulted anticline structures through converting former producing wells into water injectors, the implementation of a workover in Q4 2023 by Criterium in the BLL-A Field, the satisfaction of conditions precedent to the Acquisition and approval by all regulatory authorities of the Acquisition.
Factors that could cause actual results to vary from forward-looking statements or may affect the operations, performance, development and results of Criterium's businesses include, among other things: risks and assumptions associated with operations; risks inherent in Criterium's future operations; increases in maintenance, operating or financing costs; the availability and price of labour, equipment and materials; competitive factors, including competition from third parties in the areas in which Criterium intends to operate, pricing pressures and supply and demand in the oil and gas industry; fluctuations in currency and interest rates; inflation; risks of war, hostilities, civil insurrection, pandemics (including COVID-19), instability and political and economic conditions in or affecting
With respect to forward-looking statements contained in this press release, Criterium has made assumptions regarding, among other things: the COVID-19 pandemic and the duration and impact thereof; future exchange and interest rates; supply of and demand for commodities; inflation; the availability of capital on satisfactory terms; the availability and price of labour and materials; the impact of increasing competition; conditions in general economic and financial markets; access to capital; the receipt and timing of regulatory and other required approvals; the ability of Criterium to implement its business strategies; the continuance of existing and proposed tax regimes and effects of regulation by governmental agencies.
The forward-looking statements contained in this press release are made as of the date hereof and the parties do not undertake any obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Oil and Gas Advisories
Total proved, probable and possible reserves disclosed in this announcement in respect of the Tungkal PSC are based on the Reserve Report commissioned by MOPL and prepared by
The Resource Report describes reserves as '...estimated remaining quantities of commercially recoverable oil, natural gas, and related substances anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data, the use of established technology, and specified economic conditions, which are generally accepted as being reasonable.'
These reserves are further classified based on the level of certainty and status of development or production.
The Reserve Report classifies levels of uncertainty in accordance with the Canadian Oil and Gas Evaluation Handbook. These levels are described as PDP, PD, 1P, 2PD, 2P and 3P levels of status and uncertainty. According to the Reserve Report, estimates and uncertainty are further influenced by: (1) a variety of market factors which may influence the commerciality of resource recovery and (2) the Reserve Report is based on estimates only and there is no guarantee of actual recovery.
Any references in this presentation to initial production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Criterium. Management of Criterium believes the information may be relevant to help determine the expected results that Criterium may achieve within oil and gas interests and such information has been presented to help demonstrate the basis for Criterium's business plans and strategies with respect to the Tungkal PSC. There is no certainty that the results of the analogous information or inferred thereby will be achieved by Criterium and such information should not be construed as an estimate of future production levels, reserves or the actual characteristics and quality of Criterium's assets.
BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 5.6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 5.6:1, utilizing a conversion on a 5.6:1 basis may be misleading as an indication of value.
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