Calgary, Alberta – OBSIDIAN ENERGY LTD. (TSX: OBE) (OTCQX: OBELF) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce that it has filed an amended and restated preliminary short form prospectus (the “Amended and Restated Prospectus“) in connection with its previously announced marketed offering (the “Offering“) of subscription receipts of the Company (“Subscription Receipts“). The Amended and Restated Prospectus provides that the price of the Subscription Receipts to be issued and sold pursuant to the Offering will be $4.40 per Subscription Receipt for gross proceeds of up to $22.5 million.
The Offering is being conducted on a “best efforts” agency basis by a syndicate of agents (the “Agents“). The Agents have advised Obsidian Energy that they expect the maximum Offering size will be reached.
The Company has granted the Agents an option (the “Over-Allotment Option“) to offer and sell that number of additional Subscription Receipts as is equal to 15 percent of the aggregate number of Subscription Receipts sold under the Offering on the same terms and conditions as the Offering. The Over-Allotment Option is exercisable at any time for a period of 30 days after the closing of the Offering.
The Subscription Receipts will be offered in all Canadian provinces, excluding Québec, by way of a short form prospectus, and in the United States on a private placement basis to a limited number of “accredited investors” pursuant to the registration exemption provided by Rule 506(b) of Regulation D under the United States Securities Act of 1933, as amended (the “U.S. Securities Act“). In connection with the forgoing, the Company has filed the Amended and Restated Prospectus in each of the provinces of Canada, other than Québec, amending and restating the preliminary short form prospectus filed on November 2, 2021. There will not be any sale of Subscription Receipts until a receipt for the final short form prospectus has been issued.
The net proceeds from the Offering will used by the Company to facilitate the funding of a portion of the purchase price of the acquisition of the remaining 45% non-operated working interest in the Company’s Peace River Oil Partnership from its existing partner (the “Acquisition“) pursuant to the terms of a definitive agreement entered into between the parties (the “Acquisition Agreement“). The Acquisition is expected to close the week of November 15, 2021. Based on the expectation that the maximum Offering size will be reached, no common shares of the Company (“Common Shares“) will be issued under the Acquisition Agreement.
The gross proceeds from the sale of Subscription Receipts pursuant to the Offering will be held in escrow pending the completion of the Acquisition. If all conditions to the completion of the Acquisition are satisfied or waived (other than funding the portion of the purchase price therefor to be financed with the net proceeds of the Offering) and Obsidian Energy has confirmed the same to the Agents before 5:00 p.m. (Calgary time) on December 31, 2021, the net proceeds from the sale of the Subscription Receipts will be released from escrow to Obsidian Energy, and each Subscription Receipt will automatically be exchanged for one Common Share for no additional consideration and without any action on the part of the holder. If: (i) the Acquisition is not completed at or before 5:00 p.m. (Calgary time) on December 31, 2021; (ii) the Acquisition Agreement is terminated in accordance with its terms; or (iii) the Company advises the Agents or formally announces to the public by way of a news release or otherwise that it does not intend to proceed with the Acquisition then the purchase price for the Subscription Receipts will be returned pro rata to subscribers, together with a pro rata portion of interest earned on the escrowed funds.
The Offering is expected to close during the week of November 15, 2021.
No securities regulatory authority has either approved or disapproved of the contents of this news release. The Subscription Receipts and underlying Common Shares, have not been and will not be registered under the U.S. Securities Act or any state securities laws. Accordingly, the securities described herein may not be offered or sold within the “United States” unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to exemptions from such registration requirements. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities of Obsidian Energy in any jurisdiction in which such offer, solicitation or sale would be unlawful.