CALGARY, ALBERTA–(Marketwired – Feb. 18, 2016) – Advantage Oil & Gas Ltd. (TSX:AAV) (NYSE:AAV) (“Advantage” or the “Corporation”) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by FirstEnergy Capital Corp. pursuant to which the underwriters have agreed to purchase, on a bought deal basis, 11,750,000 common shares of Advantage (“Common Shares”) at a price of $7.45 per Common Share, for aggregate gross proceeds of $87.5 million (the “Offering”). The Corporation has also granted the underwriters an option to purchase up to an additional 15% of the Common Shares issued under the Offering at a price of $7.45 per Common Share to cover over-allotments, if any, and for market stabilization purposes, exercisable in whole or in part at any time until 30 days after the closing date of the Offering. The maximum gross proceeds that could be raised under the Offering is approximately $100.7 million should the over-allotment option be exercised in full.
The net proceeds of the Offering will be initially used to temporarily reduce indebtedness, partially fund the Corporation’s planned next expansion of its 100% owned Glacier gas plant, future acquisition opportunities and for general corporate purposes.
The Offering will be completed by way of short form prospectus in each of the provinces of Canada, other than Quebec, and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended. Closing is expected to occur on or about March 8, 2016 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the New York Stock Exchange.
The Board of Directors and Management of Advantage believes the current commodity price environment will result in an increasing number of high quality organic growth opportunities which would enhance our strategic position and long term value creation model. Accordingly, we view it as prudent to further strengthen the Corporation’s financial flexibility and position Advantage to capture growth opportunities when they are available. Additionally, Advantage is planning to proceed with another significant expansion of its 100% owned Glacier gas plant beginning in the second half of 2017 to increase processing capacity by 100 million cubic feet per day (“mmcf/d”) to a total of 350 mmcf/d. This will facilitate additional production growth in 2018 through 2020 and position the Corporation to maintain its industry leading low cost structure to capitalize on stronger natural gas pricing which we believe will materialize in the future.
The Common Shares have not been and will not be 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 applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of Common Shares in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.