CALGARY, Aug. 17, 2018 /CNW/ – PetroShale Inc. (“PetroShale” or the “Company”) (TSXV: PSH, OTCQX: PSHIF) is pleased to confirm the closing of our previously announced acquisition of high quality, light oil-weighted assets situated in our South Berthold core focus area in the North Dakota Bakken (the “Acquisition”). Total cash consideration for the Acquisition was US$52.6 million, after closing adjustments.
The Acquisition includes approximately 550 barrels of oil equivalent per day (“boepd”) (~90% light oil and liquids) of low decline production, as well as significant working interests in three primarily undeveloped drilling units which will be operated by PetroShale. The Acquisition increases our inventory of low-risk, infill drilling locations by 24%, and our undeveloped land position by over 34%.
The Acquisition was funded from a $46 million bought deal public offering of subscription receipts (which included full exercise of the over-allotment option), a $12.5 million concurrent non-brokered private placement of subscription receipts (collectively, the “Equity Financings”) and a US$10.5 million draw on the Company’s senior credit facility. The Equity Financings closed in escrow on August 14, 2018 and following the closing of the Acquisition, the funds were released to the Company and an aggregate of 31,622,205 common shares were issued upon the conversion of the subscription receipts issued pursuant to the Equity Financings. Haywood Securities Inc. acted as financial advisor to PetroShale in connection with the Acquisition.
On closing of the Acquisition, PetroShale’s borrowing base under its senior credit facility increased from US$82 million to US$92 million, affording the Company approximately US$48 million of undrawn capacity and significant financial flexibility to execute on our ongoing capital program.
This press release is not an offer of the securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration. The securities will not be publicly offered in the United States. The securities have not been and will not be registered under the U.S. Securities Act, or any state securities laws.
PetroShale is an oil company engaged in the acquisition, development and consolidation of interests in the North Dakota Bakken / Three Forks.