CALGARY, ALBERTA–(Marketwired – March 9, 2016) –
Raging River Exploration Inc. (the “Company” or “Raging River”) (TSX:RRX) announces that it has closed its previously announced bought deal financing. A total of 12,500,000 Raging River common shares have been issued at a price $8.65 per share for gross proceeds of $108,125,000, which included the exercise in full of the over-allotment option granted to the underwriters.
The syndicate of underwriters was led by FirstEnergy Capital Corp. and included Peters & Co. Limited, National Bank Financial Inc., Cormark Securities Inc., Desjardins Securities Inc., Dundee Securities Ltd., TD Securities Inc., CIBC World Markets Inc., GMP Securities L.P., RBC Capital Markets, and Scotia Capital Inc.
The net proceeds from the financing will initially be used to repay a portion of outstanding indebtedness under the Company’s credit facilities, which will be redrawn to fund the Corporation’s 2016 capital expenditure program and for general corporate purposes.
OUTLOOK
The financing has provided the Company with a great deal of optionality. Execution of the current $150-$160 million budget and realizing current strip pricing would see Raging River exit 2016 with an estimated trailing debt to cashflow of approximately 0.4 times.
The multi-year strategic plan adopted late last year continues to provide the guiding framework for continued shareholder value creation. With the Company’s net debt now considerably below our targeted debt to trailing cashflow of 1.0 times, we can continue to be very selective and opportunistic on acquisitions. Patience is required in the current acquisition market. We anticipate that the expectations of buyers and sellers will continue to align once commodity prices stabilize. We intend to only pursue potential acquisitions that are expected to complement our multi-year strategic plan and provide long term increased shareholder returns. We continue to actively evaluate a number of acquisition opportunities.
The precipitous drop in oil prices has compelled us to be innovative. Our innovation began to show through in 2015 with an approximate 25% reduction in on-stream capital costs and a 17% decrease in operating costs from average costs in 2014. Raging River remains committed to pushing the boundaries on costs and technologies to enhance our shareholder returns. We are currently evaluating and testing longer lateral wells, changes in fracture spacing, the amount of proppant placed, as well as multiple aspects of water flooding to maximize the value created per dollar invested.
Raging River’s base business remains solid. At a long term sustained oil price of US$35/bbl WTI, the existing drilling inventory is expected to provide sustainable growth for many years. Raging River remains committed and has a plan to continue to deliver superior returns to our shareholders through all commodity price cycles.
Additional corporate information can be found in our March corporate presentation available on our website at www.rrexploration.com.