The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Cequence Energy Ltd. Announces Completion of Subscription Receipt and Flow Through Share Financings

Thursday, August 19, 2010

Cequence Energy Ltd. Announces Completion of Subscription Receipt and Flow Through Share Financings08:32 EDT Thursday, August 19, 2010/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW./CALGARY, Aug. 19 /CNW/ - Cequence Energy Ltd. ("Cequence") (TSX: CQE) announces that it has closed its previously announced "bought deal" short form prospectus offering of 18,545,000 subscription receipts (the "Subscription Receipts") at a price of $2.10 per Subscription Receipt for total gross proceeds of approximately $39 million (the "Prospectus Offering"). The Prospectus Offering was conducted through a syndicate of underwriters led by FirstEnergy Capital Corp. and Peters & Co. Limited and included Cormark Securities Inc., Mackie Research Capital Corporation, Macquarie Capital Markets Canada Ltd. and National Bank Financial Inc. (collectively, the "Underwriters").The gross proceeds from the sale of the Subscription Receipts have been deposited in escrow with Valiant Trust Company and will be released to Cequence upon delivery to the escrow agent of a notice from Cequence confirming that all of the conditions to the completion of the previously announced acquisition of certain assets in the Deep Basin (the "Deep Basin Acquisition") have been satisfied and the parties to the agreement in respect of the Deep Basin Acquisition are able to complete the Deep Basin Acquisition in all material respects in accordance with the terms of such agreement as previously publicly disclosed without material amendment or waiver adverse to Cequence, but for the payment of the purchase price to be satisfied in part by the release of the gross proceeds from the Prospectus Offering from escrow (the "Escrow Release Conditions"). In the event that the Escrow Release Conditions are not satisfied at or before 4:00 p.m. (Calgary time) on September 30, 2010 (the "Deadline"), the agreement providing for the Deep Basin Acquisition is terminated at any earlier time or Cequence announces to the public that it does not intend to proceed with the Deep Basin Acquisition at any earlier time, the escrow agent will return to the holders of Subscription Receipts an amount equal to the issue price thereof and their pro rata entitlement to interest earned on such amount. Each Subscription Receipt will entitle the holder thereof to receive, without payment of additional consideration or further action, one common share upon the satisfaction of the Escrow Release Conditions.The Deep Basin Acquisition is currently anticipated to be completed in early September 2010.Cequence also granted an over-allotment option to the Underwriters to purchase, on the same terms as the Prospectus Offering, up to an additional 2,500,050 Subscription Receipts (or common shares, as applicable) not later than the earlier of the 30th day following the closing of the Prospectus Offering and the Deadline. The over-allotment option has not been exercised to date.Flow-Through Private PlacementCequence is also pleased to announce that it has closed its previously announced private placements of: (i) 3.2 million common shares ("CEE Flow-Through Shares") issuable on a "CEE flow-through basis" at a price of $2.50 per share; and (ii) 870,000 common shares ("CDE Flow-Through Shares") issuable on a "CDE flow-through basis" at a price of $2.30 per share. The aggregate gross proceeds from the private placements was approximately $10 million.The purchasers of CEE Flow-Through Shares will be entitled to renunciations of Canadian exploration expenses in an amount equal to the subscription amount from Cequence while purchasers of CDE Flow-Through Shares will be entitled to renunciations of Canadian development expenses in an amount equal to the subscription amount from Cequence.Further InformationCequence is a publicly traded Canadian energy company involved in the acquisition, exploitation, exploration, development and production of natural gas and crude oil in western Canada. Further information about Cequence may be found in its continuous disclosure documents filed with Canadian securities regulators at www.sedar.com.Forward Looking InformationCertain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to timing for completion of the Deep Basin Acquisition. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Cequence believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because Cequence can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: the ability of Cequence to complete the Deep Basin Acquisition; and the timely receipt of any required regulatory approvals. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Cequence and described in the forward-looking information. The material risk factors affecting Cequence and its business are contained in Cequence's Annual Information Form which is available under Cequence's issuer profile on SEDAR at www.sedar.com.The forward-looking information contained in this press release is made as of the date hereof and Cequence undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The Subscription Receipts and the common shares issuable pursuant to the Subscription Receipts have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.For further information: Howard Crone, President and Chief Executive Officer, (403) 806-4040, hcrone@cequence-energy.com; or David Gillis, Vice President, Finance and Chief Financial Officer, (403) 806-4041, dgillis@cequence-energy.com