Calgary, Alberta – OBSIDIAN ENERGY LTD. (TSX: OBE) (OTCQX: OBELF) (“Obsidian Energy“, the “Company“, “we“, “us” or “our“) is pleased to announce it has closed its previously announced marketed public offering of subscription receipts (the “Subscription Receipts“) at a price of $4.40 per Subscription Receipt for aggregate gross proceeds of approximately $25.9 million (the “Offering“). The Offering was conducted on a “best efforts” agency basis by a syndicate of agents ( the “Agents“). The Agents exercised in full the 15 percent over-allotment option granted to them in conjunction with today’s closing of the Offering.
Each Subscription Receipt represents the right to receive one common share of Obsidian Energy (a “Common Share“) without payment of additional consideration or further action on the part of the holder and upon satisfaction of the Escrow Release Conditions (as defined below). The Company will use the net proceeds from the Offering to facilitate financing part of the purchase price (the “Purchase Price“) under the previously announced proposed acquisition (the “Acquisition“) of the remaining 45 percent non-operated working interest in the Company’s Peace River Oil Partnership from its partner (the “Vendor“) pursuant to the terms of a definitive agreement entered into between the parties (the “Acquisition Agreement“). Given that the Offering was oversubscribed, and the over-allotment option was exercised in full, all of the Purchase Price will be paid in cash and no Common Shares will be issued to the Vendor. Subject to the satisfaction of conditions precedent thereto, closing of the Acquisition is expected to occur on or about November 24, 2021, and in any event, no later than December 31, 2021. Details of the Acquisition and related matters can be found in Obsidian Energy’s final short form prospectus dated November 12, 2021 (the “Prospectus“).
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 facilitating funding the portion of the Purchase Price 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 “Escrow Release Conditions“), the net proceeds from the sale of the Subscription Receipts will be released from escrow to Obsidian Energy or as it may direct. 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.
It is anticipated that the Subscription Receipts will be listed and posted for trading on the Toronto Stock Exchange (the “TSX“) under the symbol “OBE.R”.