Rubellite has raised $83.5 million in equity, all priced at $2.00 per share, through a combination of: (i) a $33.5 million arrangement warrant financing (the “Arrangement Warrant Financing”) whereby shareholders of Perpetual Energy Inc. (“Perpetual”) were issued arrangement warrants (the “Arrangement Warrants”) which provided them the opportunity to purchase Rubellite common shares (“Rubellite Shares”) in addition to those Rubellite Shares issued under a reorganization of Perpetual, approved by its shareholders on August 31, 2021; (ii) the issuance of Rubellite Shares on exchange of the subscription receipts previously issued under a $30 million brokered private placement to a number of arm’s length investors, which funds have been held in escrow since closing July 13, 2021 (the “Brokered Private Placement”); and (iii) the concurrent closing of the maximum $20 million raised through the fully subscribed non-brokered private placement (the “Non-Brokered Private Placement” and together with the Arrangement Warrant Financing and Brokered Private Placement, the “Financings”). The Financings resulted in the issuance of approximately 41.7 million Rubellite Shares.
Proceeds from the Financings fully repay $59.4 million in promissory notes related to the acquisition of the Company’s Clearwater assets from Perpetual.
In combination with the approximately 2.1 million Rubellite Shares issued on September 3, 2021 which formed the initial capitalization of Rubellite, the Company now has approximately 43.8 million Rubellite Shares outstanding, no debt and a working capital surplus of an estimated $22.5 million. Through its participation in the Arrangement Warrant Financing and in the Non-Brokered Private Placement, Alberta Investment Management Corporation owns approximately 8.3% of the Rubellite Shares and Sue Riddell Rose, the Company’s President and CEO, and certain entities controlled by her, owns, controls or directs, directly and indirectly, 32.0% of the Rubellite Shares. In addition, Perpetual has a five year option to purchase 4.0 million Rubellite Shares at an exercise price of $3.00 per share.
New Credit Facility
Rubellite will also today enter into a first lien credit facility with a syndicate of lenders to establish a new $3 million revolving credit facility with an initial term to May 31, 2022 and which may be extended for a further twelve months to May 31, 2023 subject to lender approval.
Rubellite currently has fourteen (13.0 net) producing multi-lateral wells on production, including the six (6.0 net) original wells drilled by Perpetual at Ukalta and the one (1.0 net) producing 2.5 leg multi-lateral well at Figure Lake acquired in January 2020. New wells that have been drilled, completed and commenced production include two (1.0 net) wells at Marten Hills which were rig released in early July, four (4.0 net) producing wells at Figure Lake and the first (1.0 net) of the planned eight well 2021 drilling program at Ukalta. Sales production is expected to ramp up as new wells fully recover load oil from the drilling process, which is recycled for future drilling operations, and volumes commence delivery to sales terminals.
Sales production at Marten Hills commenced in late August after fully recovering load oil from drilling operations and the eight leg multi-lateral wells on average are performing at Rubellite’s Marten Hills IP30 type curve production level of approximately 120 bbl/d of 22o API crude oil each. Two of the four new Figure Lake wells, each of which penetrated over 8,000 meters of Clearwater reservoir, were brought onstream August 26, 2021 and have recently begun producing formation oil for sales after a three-week period of load oil recovery. Two additional exploratory new wells over 10 miles north of the producing Figure Lake pad site have been drilled, completed and turned over to production operations, and have begun recovering load oil from drilling operations.
As previously planned, drilling activity has progressed to the Ukalta property where one (1.0 net) six-leg multi-lateral well has been drilled, completed and recently turned over to operations to commence load oil recovery and sales production. Rubellite’s planned single-rig drilling program for the remainder of 2021 consists of an additional seven (7.0 net) multi-lateral wells at Ukalta.