Calgary, Alberta–(Newsfile Corp. – June 4, 2021) – Saturn Oil & Gas Inc. (TSXV: SOIL) (FSE: SMK) (“Saturn” or the “Company“) is pleased to announce that, further to the Company’s press releases dated May 13, 2021, May 17, 2021 and May 28, 2021, it has closed the brokered and non brokered private placements for total proceeds of $32.8 million.
“With the closing of these financings, Saturn is one step closer to concluding our transformational acquisition of high-quality, light oil assets in Southeast Saskatchewan, which will position our Company as a disciplined, free-cash flow generating engine designed to drive value for shareholders and other stakeholders,” said John Jeffrey, CEO of Saturn. “We appreciate the market’s confidence in our story, demonstrated by the rapid execution of these financings, which provide Saturn with the financial flexibility to enhance our assets for the foreseeable future.”
Pursuant to the brokered portion of the offering (the “Brokered Financing“) lead by Echelon Wealth Partners Inc. together with Canaccord Genuity Corp. (collectively, the “Agents“), Saturn closed a private placement of 115,000,000 subscription receipts (the “Subscription Receipts“) at a price of $0.12 per Subscription Receipt (the “Financing Price“) for aggregate gross proceeds of $13.8 million, including exercise in full of the Agents’ 15% over-allotment option.
The gross proceeds from the sale of the Subscription Receipts, less 50% of the Agents’ fee with respect to such sale, will be held by Computershare Trust Company of Canada, as subscription receipt agent, pending satisfaction of the Escrow Release Condition (as defined below) pursuant to the terms of the subscription receipt agreement entered into upon closing of the Brokered Financing (the “Subscription Receipt Agreement“).
Each Subscription Receipt will, following completion of the previously announced proposed acquisition (the “Acquisition“) of certain light oil assets in Southeast Saskatchewan (see the Company’s May 13, 2021 press release) and the satisfaction of certain escrow release conditions as further described in the Subscription Receipt Agreement (the “Escrow Release Conditions“), entitle the holder to receive, without the payment of additional consideration or taking of further action, one special warrant of the Company (each a “Special Warrant“) on the terms set out below.
In connection with the Brokered Financing, the Agents received a cash commission equal to 7% of the aggregate gross proceeds of the Brokered Financing and were issued compensation special warrants (“Compensation Special Warrants“) equal to 7% of the number of Subscription Receipts sold in the Brokered Financing. Each Compensation Special Warrant will be exercisable into one (1) compensation option (a “Compensation Option“), for no additional consideration, at any time after the closing of the Brokered Financing (the “Closing“), and each Compensation Special Warrant not previously exercised shall be deemed exercised on the later of (i) the day after a receipt is issued for a final prospectus qualifying the Units (as defined below) for distribution in qualifying jurisdictions and (ii) the date that is four months and one day following the Closing. Each Compensation Option shall entitle the holder thereof to purchase one Unit (on the same terms as the Units below) at an exercise price of $0.12 at any time up to 24 months following the Closing.
The Company also closed the final tranche of its non-brokered financing (“Non-Brokered Financing” and together with the Brokered Financing, the “Financings“) for an additional 64,583,333 Special Warrants (for a total of 153,333,333 Special Warrants in the Non-Brokered Financing) at the Financing Price for aggregate gross proceeds in the Non-Brokered Financing of $18.4 million. In connection with the Non-Brokered Financing, the certain finders received an aggregate of $813,400 in finder’s fees and 6,779,090 Compensation Special Warrants.
On satisfaction of the Escrow Release Conditions, the Company will have 268,333,333 Special Warrants outstanding. Each Special Warrant will be convertible into one unit of Saturn (each, a “Unit“) without payment of additional consideration and shall be deemed to have been converted on the earlier of (a) four (4) months and one day from the date of issuance, and (b) five (5) days after receipt of a final receipt for a short form prospectus filed in compliance with applicable Canadian securities laws.
Each Unit will be comprised of one common share in the capital of the Company (each a “Common Share“) and one Common Share purchase warrant (each a “Warrant“), each Warrant entitling the holder thereof to purchase one Common Share (each a “Warrant Share“) in the capital of the Company at an exercise price of $0.16 per Warrant Share for 24 months from date of issuance of the Special Warrant. The Company intends to apply to list the Warrants on the TSX Venture Exchange (the “Exchange“).
The Company will use commercially reasonable efforts to prepare, file and get receipted for a final short form prospectus in the provinces where the Special Warrants are sold, qualifying the distribution of the Units and the Compensation Options. If a receipt for a final prospectus is not received on or before June 30, 2021, each Special Warrant will thereafter be convertible into 1.20 Units.
A portion of the proceeds of Financings will be used to fund the purchase price of the Acquisition and related closing adjustments associated therewith.
About Saturn Oil & Gas Inc.
Saturn Oil & Gas Inc. is a growing Canadian energy company focused on generating positive shareholder returns through the continued responsible development of high-quality, light oil weighted assets, supported by an acquisition strategy that targets highly accretive, complementary opportunities. Saturn has assembled an attractive portfolio of free-cash flowing, low-decline operated assets in Southeast Saskatchewan that provide an inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an ESG-focused culture, Saturn’s goal is to increase reserves, production and cash flows at an attractive return on invested capital. Saturn’s shares are listed for trading on the TSXV under ticker ‘SOIL’ and on the Frankfurt Exchange under symbol ‘SMK’. Further information and a corporate presentation is available on Saturn’s website at http://www.saturnoil.com/.