CALGARY, Alberta- Cardinal Energy Ltd. (“Cardinal” or the “Company“) (TSX: CJ) announces that it has closed the non-brokered private placement (the “Private Placement“) of 2nd lien secured notes for gross proceeds of $16,244,000 and 8,122,000 units (the “Units“) at a subscription price of $0.50 per Unit for proceeds of $4,061,000 as announced on December 2, 2020. The proceeds from the Private Placement will be used to repay Cardinal’s outstanding 5.50% convertible subordinated debentures which are maturing on December 31, 2020 and for general corporate purposes.
As a condition of the financing, certain directors participated in the Private Placement for approximately 23% of the offering. Cardinal insiders currently own approximately 26% of the Company’s diluted outstanding shares.
To date, through its service providers, Cardinal has been approved for approximately $18.1 million in funding in Saskatchewan and Alberta from the government abandonment and reclamation subsidy programs. Cardinal was active in the fourth quarter in its abandonment and reclamation activities and expects to receive additional funding in subsequent government subsidies through these programs.
Cardinal expects to release its 2021 budget in January which is expected to focus on debt reduction and additional asset retirement obligation expenditures. Cardinal’s low decline asset base will allow the Company to spend minimal amounts of capital to maintain its production with up to 10% of current production awaiting improved pricing before reactivating.