exploration and development activities and for general corporate purposes.
The Acquisition represents the first step in realizing on the recapitalized Company’s stated business plan of targeted acquisitions complemented by development and exploration drilling.
The Acquisition creates a new core area for the Company. Management believes that southeast Saskatchewan is a highly attractive place to operate and build a high growth junior company. The area offers exposure to a variety of light oil plays, including conventional Mississippian plays, the Bakken light oil resource play and the emerging Torquay/Three Forks play. In addition, there are an abundance of acquisition opportunities in southeast Saskatchewan.
Upon completion of the Financings and the Acquisition (and assuming the completion of the previously announced $26.5 million recapitalization financing and that the Rights Offering is fully subscribed), the Company will have approximately $38.0 million of working capital. Post closing of the Financings Alexander will have an undrawn banking facility of $13.5 million comprised of an $11.0 million revolving line of credit and a $2.5 million non-revolving line of credit. In addition, the Company has received an indicative lending value on the Assets of $15 million from a Canadian chartered bank, which amount is not included in the Company’s current borrowing base.
The Company intends to publish its 2014 budget and capital program early in the new year.
The Company wishes to clarify an error in a news release made on December 10, 2013, with respect to the issuance of options to acquire an aggregate of 19,163,332 Common Shares. Contrary to the disclosure in the press release, such options were not issued on December 10, 2013.
In conjunction with the announcement of the transactions disclosed in this news release, the Company has granted options to acquire 9,230,000 Common Shares, 8,750,000 of which were granted to the directors and officers of the Company. Each grant of options is for a five year term. The options vest over three years (1/3 on each of the first, second and third anniversary of the grant date). The options are exercisable at a price of $0.61 per Common Share.
Alexander trades on the TSXV under the symbol “ALX”. Alexander currently has 191,633,327 Common Shares and 119,735,183 Common Share purchase warrants outstanding. Alexander anticipates that it will have approximately 298,783,327 Common Shares, 119,735,183 Common Share purchase warrants and 9,230,000 options to acquire Common Shares outstanding following the completion of the Acquisition and the issuance of the Common Shares underlying the Special Warrants, but excluding any Common Shares issued pursuant to the previously announced rights offering and up to 56,932,817 Common Shares and 20,264,817 Common Share purchase warrants issuable pursuant to additional closings in respect of the previously announced non-brokered private placement.
Forward-Looking and Cautionary Statements
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by the Company including, without limitation, concerning the Acquisition, the Financings, the success of future drilling, development and completion activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of the Company’s properties, the successful application of drilling, completion and seismic technology, prevailing weather conditions, commodity prices, royalty regimes and exchange rates, the application of regulatory and licensing requirements and the availability of capital, labour and services.
Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in the Company’s Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and the Company’s other public disclosure documents which have been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly 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. Boe/d means barrel of oil equivalent per day.
In this press release: (i) mcf means thousand cubic feet; (ii) mcf/d means thousand cubic feet per day; (iii) mmcf means million cubic feet; (iv) mmcf/d means million cubic feet per day; (v) bbls means barrels; (vi) mbbls means thousand barrels; (vii) mmbbls means million barrels; (viii) bbls/d means barrels per day; (ix) bcf means billion cubic feet; (x) mboe means thousand barrels of oil equivalent; and (xi) mmboe means million barrels of oil equivalent.
Boe’s may be misleading, particularly if used in isolation. A boe conversion ratio of 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.
Original Oil in Place (OOIP) is the equivalent to Discovered Petroleum Initially In Place (DPIIP) for the purposes of this press release. DPIIP is defined as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. There is no certainty that it will be commercially viable to produce any portion of the resources. A recovery project cannot be defined for this volume of DPIIP at this time, and as such it cannot be further sub-categorized.
The Acquisition is considered an “Expedited Acquisition” under the policies of the TSX Venture Exchange and as such the TSX Venture Exchange has not reviewed the Acquisition or the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.