CALGARY, ALBERTA–(Marketwired – Feb. 29, 2016) – Strategic Oil & Gas Ltd. (“Strategic” or the “Company”) (TSX VENTURE:SOG) Strategic is pleased to announce the upsizing and closing of the private placement financing of 94,851 secured Convertible Notes (the “Notes”) at a price of $1,000 per Note, for aggregate gross proceeds of $94,851,000 (the “Offering”). Insiders, including officers, employees and directors of the Company, subscribed for a significant portion of the Offering. The Company also received support from existing and new institutional investors.
The proceeds from the Offering are being used to repay the Corporation’s existing credit facilities, the bridge loan from its major shareholder and provide funding for the winter capital program. The Company has approximately $25 million of cash which will fund ongoing working capital and for general corporate purposes.
The Notes rank as senior secured notes, and have a 5‐year term, bear interest at 8% payable semi‐annually (subject to, at the Company’s option, being paid‐in‐kind in equivalent Notes for the first two years) and are convertible into common shares of the Company at a price of $0.09 per share (the “Conversion Price”). In addition, the Notes will be callable (i) any time if the 90‐day volume weighted average trading price of the underlying shares exceeds 400% of the Conversion Price; or (ii) after the 4th anniversary of issuance, regardless of share price, at par plus accrued and unpaid interest plus the nominal value of remaining interest from the effective date of redemption to the maturity date.
The Offering constitutes a “related party transaction” within the meaning of Multilateral Instrument 61‐101 – Protection of Minority Security Holders in Special Transactions (“MI 61‐101”) and Strategic has relied on the financial hardship exemption in sections 5.5(g) and 5.7(e) of MI 61‐101 in respect of the valuation and minority approval requirements therein, respectively.
The transaction provides Strategic with financial flexibility through the current low commodity price environment and positions the Company to create long‐term value for its shareholders. RBC Capital Markets acted as sole agent for the Offering and continues to act as financial advisor to the Company. Cormark Securities Inc. and Dundee Capital Markets Ltd. acted as strategic advisors to the Company on this transaction.
ADDITIONAL INFORMATION
Additional information is also available at www.sogoil.com and at www.sedar.com.