CALGARY, AB, Feb. 28, 2022 /CNW/ – Journey Energy Inc. (TSX: JOY) (“Journey” or the “Company“) announces that it has entered into an agreement with Acumen Capital Finance Partners Limited (“Acumen“), pursuant to which Acumen has agreed to purchase, on a “bought deal” basis, 2,480,000 common shares (the “Flow-Through Shares“) of Journey to be issued as “flow-through shares” with respect to “Canadian development expenses” within the meaning of the Income Tax Act (Canada) and the regulations thereunder in force as of the date hereof (the “Tax Act“) at a price (the “Offering Price“) of $4.25 per Flow-Through Share, for gross proceeds to the Company of approximately $10.5 million (the “Offering“).
Journey has granted Acumen an option to purchase additional Flow-Through Shares, equal to 15% of the number of Flow-Through Shares sold pursuant to the Offering at the Offering Price, for market stabilization purposes and to cover over-allotments for a period expiring 30 days after the date of closing.
Journey will use proceeds from the Offering to incur eligible “Canadian development expenditures” within the meaning of the Tax Act in an aggregate amount of not less than the gross proceeds raised from the Offering and will renounce qualifying expenditures to purchasers of the Flow-Through Shares on or before December 31, 2022.
The Flow-Through Shares will be offered by way of short form prospectus in each of the provinces of Canada, excluding Québec, pursuant to National Instrument 44-101 – Short Form Prospectus Distributions and some may be resold in the United States pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “U.S. Securities Act“) and in such other jurisdictions outside of Canada and the United States as agreed to by the Company, in each case in accordance with all applicable laws and provided that no prospectus, registration statement or similar document is required to be filed in such jurisdiction.
Closing is expected on or about March 18, 2022 and is subject to Toronto Stock Exchange and other necessary regulatory approvals.
The Flow-Through Shares have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States , nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About the Company
Journey is a Canadian exploration and production company focused on conventional, oil-weighted operations in western Canada. Journey’s strategy is to grow its production base by drilling on its existing core lands, implementing water flood projects, and executing on accretive acquisitions. Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods.