CALGARY, ALBERTA–(Marketwired – March 21, 2017) – PetroShale Inc. (“PetroShale” or the “Company“) (TSX VENTURE:PSH)(OTCQX:PSHIF) is pleased to announce today that it has filed, and obtained a receipt for, a preliminary short form prospectus in each of the provinces of Alberta, British Columbia, Ontario and Saskatchewan in respect of a commercially reasonable best efforts marketed public offering (the “Offering“) of a minimum (the “Minimum Offering“) of 77,777,778 common voting shares (the “Shares“) and a maximum (the “Maximum Offering“) of 111,150,000 Shares, each at a price of $0.90 per Share, for minimum proceeds of $70,000,000 and maximum proceeds of $100,035,000. The Offering will be conducted by Haywood Securities Inc. (the “Agent“) as the Company’s sole agent. In connection with the Offering, the Company has granted to the Agent an over-allotment option, exercisable in whole or in part for a period of 30 days from closing of the Offering, to offer for sale up to an additional 10% of the number of Shares sold under the Offering, at a price of $0.90 per Share, to cover over-allotments, if any.
Mr. M. Bruce Chernoff (“Chernoff“), the Company’s largest shareholder, Executive Chairman, Chief Executive Officer and a Director has advised the Company and the Agent that, and it is a condition of the Offering that, he will purchase, either directly or indirectly through affiliated entities beneficially owned or controlled by him, a minimum of 38,888,889 Shares pursuant to the Offering (being a minimum of approximately $35 million of Shares, which amounts may form part of the Minimum Offering, and may purchase up to 55,555,556 Shares (approximately $50 million of Shares) pursuant to the Offering. Such participation by Chernoff in the Offering is considered to be a “related party transaction” (as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“)) and is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101 as a result of available exemptions thereunder, which are described in greater detail in the Company’s preliminary short form prospectus. It is also a condition of the Offering that at least 38,888,889 Shares will be issued (exclusive of any Shares purchased by Chernoff).
The Offering is subject to regulatory approval, including approval of the TSX Venture Exchange, and the entering into by the Company and the Agent of an agency agreement, and is expected to close on or about April 11, 2017. The Company intends to use the net proceeds of the Offering for debt repayment, its increased capital program and for general corporate purposes.
PetroShale is also pleased to announce that it has entered into an agreement with its lender under its senior secured revolving credit facility (“Senior Credit Facility“), to provide for an increase in the borrowing base and credit available thereunder to US$30.9 million and an extension of the revolving term of the Senior Credit Facility to February 28, 2018. A copy of the amendment to the Senior Credit Facility is available on SEDAR at www.sedar.com under PetroShale’s SEDAR profile.
About PetroShale Inc.
PetroShale is an oil company engaged in the acquisition, development and consolidation of interests in the North Dakota Bakken / Three Forks.