CALGARY, ALBERTA–(Marketwired – May 25, 2016) – Cardinal Energy Ltd. (“Cardinal” or the “Company”) (TSX:CJ) is pleased to announce that it has entered into a bought deal financing agreement with a syndicate of underwriters led by CIBC Capital Markets (collectively, the “Underwriters”), pursuant to which they have agreed to purchase for resale to the public, on a bought deal basis, 5,350,000 common shares of the Company (“Common Shares”) at a price of $9.35 per Common Share for gross proceeds of $50 million (the “Offering”). The Underwriters will have an option to purchase up to an additional 535,000 Common Shares issued under the Offering to cover over-allotments, if any, exercisable in whole or in part at any time until 30 days after the closing date. The maximum gross proceeds that could be raised under the Offering is approximately $55 million should the overallotment option be exercised in full.
Cardinal intends to use the net proceeds of the Offering to initially reduce indebtedness and then subsequently redraw such amounts necessary to:
- expand its 2016 Bantry drilling program;
- begin a Mitsue drilling program;
- allocate capital spending for facilities to further reduce operating costs; and
- allow Cardinal to be opportunistic with potential acquisition opportunities.
Following closing of the Offering, Cardinal expects to increase its base capital expenditure budget and update its 2016 guidance. The net bank debt, following the closing of the Offering, is expected to be approximately $40 million.
The Offering will be completed by way of short form prospectus in all provinces of Canada, 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. The Offering is subject to normal regulatory approvals, including the Toronto Stock Exchange and is expected to close on or about June 15, 2016.
This press release is not an offer of the Common Shares for sale in the United States. The Common Shares many not be offered or sold in the United States absent registration or an exemption from registration. The Common Shares will not be publicly offered in the United States. The Common Shares have not been and will not be registered under the U.S. Securities Act, or any state securities laws.
About Cardinal Energy Ltd.
Cardinal is a junior Canadian oil focused company built to provide investors with a stable platform for dividend income and growth. Cardinal’s operations are focused in all season access areas in Alberta.