CALGARY, ALBERTA–(Marketwired – July 2, 2015) – Lightstream Resources Ltd. (the “Company” or “Lightstream”) (TSX:LTS) announces that we have entered into a privately negotiated agreement to issue a total of US$395 million in second lien notes (“Secured Notes”) in exchange for US$465 million of existing 8.625% unsecured senior notes due 2020 (“Unsecured Notes”) which will be cancelled. We have also agreed to issue to the same parties, with an expected closing in mid-July, an additional US$200 million in Secured Notes for cash proceeds, which we will use to reduce the borrowing amount under our credit facility. The borrowing base under our credit facility is unchanged at Cdn$750 million. RBC Capital Markets, LLC acted as our financial advisor in connection with these transactions.
The Secured Notes bear interest at 9.875% and mature June 15, 2019. The notes are secured by second-priority liens on all of Lightstream’s assets which rank behind the security under our credit facility. The exchange transaction reduces our debt by approximately Cdn$90 million, which also reduces annual cash interest expense associated with our Unsecured Notes and Secured Notes collectively by Cdn$1.3 million. In addition, if we complete the issuance of Secured Notes for cash in mid-July 2015, we will reduce the outstanding borrowing under our credit facility by approximately Cdn$250 million, which would increase the credit available under the credit facility to approximately Cdn$375million.
The Secured Notes have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the U.S. 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 Secured Notes, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Lightstream Resources Ltd. is an oil and gas exploration and production company focused on light oil in the Bakken and Cardium resource plays. We are committed to delivering industry leading operating netbacks, strong cash flows and consistent operating results through leading edge technology applied to a multi-year inventory of existing and emerging resource play opportunities. Our long-term strategy is to efficiently develop our assets and deliver an attractive dividend yield.
Forward Looking Statements. Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to, but not limited to closing of the transactions contemplated herein; our liquidity position; anticipated interest expense and debt reduction; and Lightstream’s guidance for 2015, and expectation that funds flow will exceed capital expenditures in 2015.
The forward-looking statements are based upon certain material factors and expectations and assumptions of Lightstream including, without limitation: closing of the issuance of second lien notes for cash by the parties on the terms stated herein; that Lightstream will continue to conduct its operations in a manner consistent with past operations; the general continuance of current industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes, the accuracy of the estimates of Lightstream’s reserves and resource volumes; certain commodity price and other cost assumptions; and the continued availability of adequate financing and cash flow to fund its planned expenditures. Although Lightstream believes the material factors, expectations and assumptions on which the forward-looking statements are based are reasonable, no assurance can be given that these factors, expectations and assumptions will prove to be correct.
The forward-looking statements in this press release are not guarantees of future performance and should not be unduly relied upon. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements including, but not limited to: failure to close the transactions contemplate herein on the expected timing or at all; failure to satisfy the conditions to close of those transactions; changes in commodity prices and exchange rates; general conditions in the oil and gas industry; operational risks in development, exploration and production; unanticipated operating results or production declines; delays or changes in exploration or development plans; the uncertainty of oil and gas reserve estimates; increase in costs; reliance on industry partners; availability of equipment and personnel; changes in tax or environmental laws, royalty rates or other regulatory matters; increased debt levels or debt service requirements; limited, unfavorable or lack of access to capital markets; a lack of adequate insurance coverage; and the impact of competition. Certain of these risks are set out in more detail in our Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com. Except as may be required by applicable securities laws, Lightstream assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
Lightstream Resources Ltd.
John D. Wright
President and Chief Executive Officer
Lightstream Resources Ltd.
Peter D. Scott
Senior Vice President and Chief Financial Officer
Lightstream Resources Ltd.
Annie C. Belecki