Calgary, Alberta (FSCwire) – ARROW Exploration Ltd. (“Arrow”) and Front Range Resources Ltd. (“FRK” or “Front Range”) (TSXV: FRK) are pleased to announce that, further to the joint news releases issued by Arrow and Front Range dated June 4, 2018 and August 27, 2018, Arrow has closed its previously announced private placement financing of Subscription Receipts for gross proceeds of US$17.69 million as of September 17, 2018.
The Subscription Receipt financing is the first of two steps in Arrow’s planned financing related to the Arrangement (defined below), with an additional US$640,000 committed by Arrow’s management and Board towards the private placement of units into FRK anticipated to close following approval of the TSXV, approval of the Arrangement by shareholders of FRK at their meeting (scheduled for September 21, 2018, to approve, among other things, the Arrangement), and upon all of the other Arrangement closing conditions being met.
The US$17.69 million proceeds from the Subscription Receipt financing have been placed in escrow until all the regulatory approvals and closing conditions of the Arrangement and its contemporaneous transactions are met. Assuming all Arrangement closing conditions are met, it is anticipated that the Arrangement will close on or about September 25, 2018 with total gross proceeds raised of approximately US$18.33 million. Trading in resulting issuer securities is expected to commence prior to October 1, 2018.
FRK and Arrow entered into an arrangement agreement dated as of June 1, 2018, as amended, whereby FRK and Arrow will complete a business combination (the “Arrangement”) pursuant to a plan of arrangement under the Business Corporations Act (Alberta). At the September 21, 2018 meeting, FRK shareholders will be asked to consider and vote upon, among other things, the acquisition of all of the issued and outstanding securities of Arrow pursuant to the Arrangement. For a description of the contemporaneous transactions, see the August 27, 2018 news release issued by FRK and Arrow, and the August 24, 2018 Information Circular filed on FRK’s SEDAR profile.
Arrow anticipates putting the financing proceeds to immediate use following closing of the Arrangement. Arrow’s first exploration well, the Danes-1, will be drilled on the 100%-owned Llanos-23 Block. The Danes-1 well is expected to spud around mid-October and is targeting a 3D-seismic defined exploration prospect with results from the well expected before the end of November. Following the drill of Danes-1, Arrow will begin the 2018/19 recompletion campaign on Llanos-23 initially targeting 4-5 wells with oil identified in bypassed zones. Arrow has additional exploration wells and recompletion activities planned for the 2018/2019 program including an exploration well on the Tapir block.
Front Range has applied to the TSXV for an exemption from the sponsorship requirements in connection with the Arrangement. There is no assurance that such exemption will be granted.
Front Range is a Canadian public company with natural gas assets in Western Canada. At Pepper, Alberta, Front Range has an operated 100% working interest in 56 contiguous sections (35,840 acres) of prospective Montney land, located at the south end of the Montney trend in Alberta. In addition, Front Range has non-operated production at Fir, Alberta from 13 sections (4.1 net sections), with average daily sales production of 128 boe/d net to Front Range in the second quarter of 2018. As at June 30, 2018, Front Range had no debt and approximately C$2.765 million in estimated working capital.