CALGARY, June 15, 2016 /CNW/ – Toro Oil & Gas Ltd. (TSXV: TOO) (“Toro” or the “Company”) is pleased to announce that, in connection with its previously announced overnight marketed offering, it has now entered into a bought deal financing agreement with a syndicate of underwriters led by AltaCorp Capital Inc., and including GMP Securities L.P., Macquarie Capital Markets Canada Ltd., National Bank Financial Inc., FirstEnergy Capital Corp. and PI Financial Corp. (collectively, the “Underwriters”), to sell 49,138,600 units (“Units”) of the Company at a price of $0.23 per Unit for gross proceeds of approximately $11.3 million (the “Offering”). Each Unit consists of one common share (“Common Share”) and one-half of one transferable common share purchase warrant (“Warrant”) of the Company. Each whole Warrant will be exercisable at $0.40 and will entitle the holder thereof to acquire one Common Share for a period of three years following the closing of the Offering. The Company will file an amended and restated preliminary prospectus in all provinces of Canada, except Québec, to reflect the terms of the Offering.
The Company has also granted the Underwriters an over-allotment option to purchase additional Units in an amount up to 15% of the number of Units sold pursuant to the Offering, exercisable in whole or in part at any time up to 30 days from the closing of the Offering.
The Offering is being conducted in all Provinces of Canada (other than Québec) 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 net proceeds from the Offering will be used to expand the Company’s capital budget, for debt reduction and for general corporate purposes.
The completion of the Offering is subject to certain conditions, including the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange (“TSXV”). Closing of the Offering is expected to occur on or about June 29, 2016.
The Company has applied to list the Common Shares, Warrants and shares issuable upon conversion of the Warrants pursuant to the Offering on the TSXV. Such listing will be subject to Toro fulfilling all of the listing requirements of the TSXV.
The Common Shares and Warrants underlying the Units 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 press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Units in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Toro continues to be encouraged by the production performance of wells drilled during the Company’s 2015 first phase program at Hamilton Lake. Production results for a number of Hamilton Lake wells now exceed six months. Toro’s Hamilton Lake acreage consists of 83 net sections out of a total 140 net sections of Alberta Viking acreage. As reported in the Company’s 2015 year-end reserves press release on March 3, 2016, Toro delivered finding, development and acquisition costs on a proved plus probable basis of $16.08 per boe which is very comparable to other long-standing Viking oil producers and evidences the quality of the Hamilton Lake Viking play. In conjunction with its external reserve evaluator, Sproule Associates Limited, Toro recorded 45 drilling locations in its December 31, 2015 reserve report, however Toro assesses its Viking portfolio to contain over 600 potential drilling locations, the majority of which are at Hamilton Lake. The Company believes that actual Toro Hamilton Lake well performance together with heightened acquisition activity in the Alberta Viking fairway continues to support a value proposition for Toro shareholders. Upon the successful completion of this financing, the Company anticipates it will be well positioned to take advantage of recovering commodity prices.
Toro intends to release updated Board approved guidance for the balance of 2016 assuming a successful closing of this financing and with improved clarity of future commodity prices.
About Toro Oil & Gas Ltd.
Toro is a junior oil and gas energy company listed on the TSX Venture Exchange. Toro is focused on acquiring, developing and exploiting large oil in place pools within the Alberta-Saskatchewan Viking light oil fairway. Toro intends to grow by way of organic development and strategic acquisitions while maintaining strict financial discipline to maximize shareholder return.