CALGARY, Alberta – Pipestone Energy Corp. (“Pipestone Energy” or the “Company”) is pleased to announce that Kim Anderson has been appointed to the Pipestone Energy Board of Directors (the “Pipestone Board”) effective September 24, 2021 and will also serve as a member of the Audit Committee. Ms. Anderson is currently the Chief Financial Officer of Heartland Generation, and prior to that was Chief Financial Officer of TSX-Listed Athabasca Oil Corporation. Ms. Anderson holds a Bachelor of Commerce degree from the Haskayne School of Business at the University of Calgary and is a Chartered Professional Accountant.
“We are pleased to welcome Kim Anderson to the Board of Directors of Pipestone Energy. Ms. Anderson brings a broad range of experience to the Pipestone Board in both private and public capital markets, including: corporate strategy, treasury operations, financial management, investor relations, mergers & acquisitions, and both equity and debt financing,” said Gord Ritchie, Chair of the Pipestone Board.
Pipestone Energy also reports that Pipestone Energy’s largest single shareholder, Canadian Non-Operated Resources L.P. (“CNOR LP“) is in the process of being dissolved and as such has distributed its 103,750,000 common shares (“Common Shares“) of Pipestone Energy to its limited partners (the “Distribution“). As a result, and based on information publicly filed, Riverstone V REL CNOR LP (“Riverstone V”) now beneficially owns 47,159,714 Common Shares and its affiliate Riverstone Pipestone LP (“Riverstone LP”, and together with Riverstone V, “Riverstone”) continues to own 52,690 convertible preferred shares (the “Preferred Shares”), representing an aggregate approximate 40.5% of the voting securities of Pipestone Energy (on a notional as-converted basis of the Preferred Shares as of the date of the Distribution); and Al Mehwar Commercial Investments LLC (“Al Mehwar”), an affiliate of Amwal Investments LLC (“Amwal”), now beneficially owns 31,439,809 Common Shares, representing approximately 11.2% of the voting securities of Pipestone Energy. The remainder of CNOR LP’s Common Shares, being 25,150,477 Common Shares representing an approximate 9.0% of the voting securities of Pipestone Energy, were distributed to the other limited partners of CNOR LP with no public filings issued.
The CNOR LP nomination agreement, dated January 4, 2019 (available on the Corporation’s profile at www.sedar.com) which entitled it to nominate three directors for election to the Pipestone Board for so long as it held in excess of 30% of the Common Shares, has been terminated. In its place Riverstone can now nominate two directors for election to the Pipestone Board pursuant to the Riverstone LP nomination agreement dated effective September 15, 2020 for so long as it and its affiliates hold in excess of 20% of the voting securities of the Corporation. Currently, Riverstone is represented on the Pipestone Board by Messrs. Robert Tichio and Jesal Shah. Pipestone has also entered into a new nomination agreement with Al Mehwar, providing that Al Mehwar can nominate one director for election to the Pipestone Board for so long as it or its affiliates collectively hold in excess of 10% of the voting securities of the Corporation. The Riverstone LP and Al Mehwar nomination agreements are available at www.sedar.com.
CNOR LP has assigned its existing registration rights agreement with Pipestone Energy dated effective January 4, 2019 (available at www.sedar.com) to Riverstone V, which provides for four customary “prospectus demand rights”, three of which have been waived by Riverstone V. Riverstone therefore has a total of four prospectus demand rights considering the three existing rights that Riverstone LP has pursuant to the registration rights agreement (the “Preferred Share Investor Registration Rights Agreement”) dated effective September 15, 2020 among Riverstone LP, GMT Capital Corp. (“GMT Capital”) and the Corporation (available at www.sedar.com).
Following the Distribution, all of the outstanding investor rights for significant shareholders are summarized above, plus those rights held by GMT Capital, which was not involved in the Distribution, pursuant to the Preferred Share Investor Registration Rights Agreement, being two customary prospectus demand rights and piggy-back rights; and GMT Capital is entitled to nominate one director for election to the Pipestone Board pursuant to the GMT Capital nomination agreement dated effective September 15, 2020 for so long as it, its affiliates or GMT Exploration Company LLC holds in excess of 10% of the voting securities of the Corporation. Certain hedge fund and private client accounts of GMT Capital beneficially own 20,424,509 Common Shares and 11,540 Preferred Shares, representing 15.1% of the voting securities of Pipestone Energy. The GMT Capital nomination agreement is available at www.sedar.com.
Paul Wanklyn, President and CEO of Pipestone Energy would like to thank the limited partners of CNOR LP for their vision and support of both Pipestone Energy, and the previous private company, Pipestone Oil Corp in making the commitments which allowed for the exciting development taking place in the field today. The Pipestone area holds significant future value potential for all shareholders, and each of Riverstone, Al Mehwar, GMT Capital and GMT Exploration Company LLC continues to support Pipestone Energy’s exceptional growth strategy.
Pipestone Energy Corp.
Pipestone Energy is an oil and gas exploration and production company focused on developing its large condensate-rich Montney asset base in the Pipestone area near Grande Prairie. Pipestone Energy is fully funded to organically grow its production from 15.6 Mboe/d in 2020 to a forecast 35 Mboe/d (midpoint) in 2022, while maintaining a conservative leverage profile. Beginning in Q4 2021, the Company expects to generate free cash flow above growth and maintenance expenditures. Pipestone will initially prioritize the repayment of debt, with a target of less than 0.5x debt to cash flow prior to the end of 2022. The Pipestone Board is assessing all options to maximize shareholder returns through potential uses for future free cash flow, which could include share buyback programs, a future dividend, as well as investment in further growth or potential acquisitions. Pipestone Energy is committed to building long term value for our shareholders while maintaining the highest possible environmental and operating standards, as well as being an active and contributing member to the communities in which it operates. Pipestone Energy’s Common Shares trade under the symbol PIPE on the TSX.