CALGARY, Jan. 3, 2019 /CNW/ – Standard Exploration Ltd. (“Standard” or the “Corporation“) (SDE : TSXV) is pleased to announce that it has received the final approval of the TSX Venture Exchange (“TSXV“) with respect to: (i) the non-brokered private placement of common shares (“Common Shares“) and units (“Units“) of the Corporation, for aggregate gross proceeds of $18,011,000 (the “Private Placement“); (ii) the appointment of a new management team (the “New Management Team“) and board of directors (the “New Board“); (iii) the acquisition by the Corporation of all of the limited partnership units of Gulf Pine Energy Partners, LP (“Gulf Pine“); (iv) the Reorganization and Investment Agreement and the Equity Purchase and Sale Agreement, each dated November 12, 2018 (collectively, the “Agreements“); (v) a consolidation of the Common Shares on the basis of one post-consolidated Common Shares for every five pre-consolidated Common Shares; and (vi) the name change of the Corporation from “Standard Exploration Ltd.” to “Southern Energy Corp.” and the new trading symbol “SOU”.
The Private Placement, appointment of the New Management Team and New Board, the acquisition of Gulf Pine, and the Agreements were initially announced by the Corporation by way of press release dated November 13, 2018 and closing with respect thereto was announced on December 20, 2018.
Pursuant to the Private Placement, Standard issued an aggregate of 289,600,000 Units (57,920,000 on a post-consolidated basis) and 610,950,000 Common Shares (122,190,000 on a post-consolidated basis) for aggregate gross proceeds of $18,011,000. Each Unit is comprised of one Common Share and one performance-based Common Share purchase warrant (each, a “Performance Warrant”). The Performance Warrants vest and become exercisable as to one-third upon the 20-day volume weighted average trading price of the Common Shares (the “Market Price”) equaling or exceeding $0.03 (on a pre-consolidated basis), an additional one-third upon the Market Price equaling or exceeding $0.04 (on a pre-consolidated basis) and a final one-third upon the Market Price equaling or exceeding $0.05 (on a pre-consolidated basis). In addition, in the event the Market Price equals or exceeds $0.08 (on a pre-consolidated basis), each Performance Warrant shall be exercisable for 1.5 Common Shares, provided that, at the time of exercise in respect of the additional 0.5 of a Common Share per Performance Warrant (the “Performance Incentive”), the Common Shares are listed on the facilities of a recognized stock exchange (other than the TSX Venture Exchange (“TSXV”)), the Common Shares are acquired for cash or for the securities of a company listed on a recognized stock exchange (other than the TSXV).
The principal purpose of the gross proceeds of the Private Placement are to fund the acquisition of Gulf Pine, the Corporation’s short term exploration and development costs, and for general corporate purposes. The New Management team believes there is an excellent opportunity to consolidate high quality, high netback, low decline oil and gas assets in under-exploited basins in the US Gulf Coast states at highly attractive metrics. The New Management Team will focus away from high-priced and infrastructure constrained shale basins in the US, choosing instead to establish a dominant position in proven oil and gas basins which attract some of the best commodity pricing in the US.
The Corporation has paid eligible finders a cash commission for gross proceeds of the Private Placement that resulted from such finder’s efforts, subject to compliance with applicable securities laws. An aggregate of $740,670 in finder’s fees were paid to finders.
Pursuant to applicable securities laws, all securities issued pursuant to the Private Placement are subject to a hold period of four months plus one day following the date of issuance of such securities.
New Management Team and New Board
Contemporaneous with the closing of the Private Placement, the appointment of the New Management Team was completed and the former board of directors and management team of the Corporation resigned. The New Management Team is led by Ian Atkinson as President, Chief Executive Officer and a director, Calvin Yau, as Vice President, Finance and Chief Financial Officer, Chris Birchard, Vice President, Geoscience and Gary McMurren, Vice President, Engineering. Joining Mr. Atkinson on the New Board are Bruce Beynon, Michael G. Kohut, Tamara MacDonald, Andrew McCreath, C. Neil Smith and R. Steven Smith, with Sony Gill serving as Corporate Secretary.
Gulf Pine Acquisition
The Corporation also acquired all of the issued and outstanding limited partnership units of Gulf Pine for cash consideration of USD$3,425,000. Gulf Pine is a limited partnership existing under the laws of the State of Delaware and a private junior oil and gas exploration, development and production company formed for the purpose of acquiring, and subsequently enhancing, producing oil and gas properties primarily in Alabama and Mississippi.
Name Change and Consolidation
The TSXV has also approved: (i) the change of name of the Corporation from “Standard Exploration Ltd.” to “Southern Energy Corp.” and the Common Shares will commence trading on the TSXV under the Corporation’s new name and new trading symbol “SOU”; and (ii) consolidation of the Common Shares on the basis of one post-consolidated Common Share for every 5 pre-consolidated Common Shares.
Resumption of Trading
The Corporation anticipates that the Common Shares will resume trading under the Corporation’s new name and new trading symbol “SOU” on January 4, 2019.