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Press release from Marketwire

Paramount Resources Ltd. Announces Flow-Through Share Offerings Totaling $110 Million and Provides Update Relating to Credit Facility Expansion and Kaybob Deep Cut Project

Monday, September 10, 2012

Paramount Resources Ltd. Announces Flow-Through Share Offerings Totaling $110 Million and Provides Update Relating to Credit Facility Expansion and Kaybob Deep Cut Project16:32 EDT Monday, September 10, 2012CALGARY, ALBERTA--(Marketwire - Sept. 10, 2012) - NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATESParamount Resources Ltd. (TSX:POU) ("Paramount" or the "Company") has entered into an agreement to sell, through a syndicate of underwriters led by BMO Capital Markets, on a guaranteed agency basis, 1,455,000 Class A Common Shares of the Company ("Common Shares") to be issued on a "flow-through" basis in respect of Canadian exploration expenses ("CEE") at a price of $31.00 per share and 356,000 Common Shares to be issued on a "flow-through" basis in respect of Canadian development expenses ("CDE") at a price of $28.15 per share, for aggregate gross proceeds of $55,126,400. The Common Shares will be offered for sale to the public in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Nova Scotia by way of a short-form prospectus. Closing of the offering is expected to occur on or about October 2, 2012. In conjunction with this offering, Paramount also intends to issue to Clayton H. Riddell or companies controlled by Mr. Riddell, Paramount's Chairman and Chief Executive Officer, by way of private placement, 646,000 Common Shares to be issued on a "flow-through" basis in respect of CEE and 1,244,000 Common Shares to be issued on a "flow-through" basis in respect of CDE, at the same prices as the public offering, for aggregate gross proceeds of $55,044,600. Closing of the private placement is expected to occur on or before the closing date of the public offering. The gross proceeds from the offerings will be used by Paramount to incur eligible CEE and CDE. The completion of the offerings is subject to Paramount receiving all necessary regulatory approvals. The Company is also continuing to work on a proposal from one of its lenders for an expansion of the Company's credit facility. The proposed expanded credit facility is to consist of a revolving operating tranche and a non-revolving tranche to be used to fund the previously announced construction and expansion of the Company's Kaybob deep cut natural gas processing facilities and the drilling of additional wells. Under the current proposal, the credit facility would have a size of at least $600 million, would be committed from the targeted effective date of November 1, 2012 and would be due June 30, 2015. Upon completion of the Kaybob deep cut projects by a stipulated date, the credit facility would be converted into a conforming borrowing base revolving credit facility based on the borrowing base at that time. The facility is expected to have terms customary for structured financings of this nature. There is no assurance that the Company's existing credit facility will be expanded on this basis or at all. The Company has entered into a long term agreement with a midstream company to de-ethanize and fractionate the Company's NGL volumes that will be produced from its Kaybob area deep cut facilities. The midstream company has undertaken to expand its facilities to process Paramount's NGL streams. Paramount has also entered into an agreement in principle with a petro-chemical producer on long-term arrangements for the sale of the Company's ethane production and is pursuing long term arrangements for the transportation of its Kaybob area NGL volumes. Paramount is a Canadian oil and natural gas exploration, development and production company with operations focused in Western Canada. Paramount's Common Shares are listed on the Toronto Stock Exchange under the symbol "POU". Advisory Regarding Forward-Looking StatementsCertain statements in this news release constitute forward-looking information under applicable securities legislation. Forward-looking information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "continue", "estimate", "propose", "budget", "forecast", "outlook", "may", "will", "could", "potential", "target" or similar words suggesting future outcomes or statements regarding an outlook. In particular, this news release contains, without limitation, forward-looking statements pertaining to the timing and receipt of necessary approvals and the anticipated completion of the offerings and the use of proceeds therefrom; the outcome of diligence reviews and negotiations concerning the expansion of the Company's credit facility including the size, timing and terms thereof; the timing of the construction and expansion of the Company's Kaybob deep cut natural gas processing facilities; the negotiation and completion of arrangements concerning the sale and/or export of Paramount's NGL. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although Paramount believes that the expectations reflected in such forward looking information are reasonable, undue reliance should not be placed on them as Paramount cannot give any assurance that such expectations will prove to be correct. 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 Paramount. Information regarding factors that affect Paramount's future results are set forth in documents filed by Paramount with the Canadian securities regulatory authorities and available on www.sedar.com. The forward-looking information in this news release is made as of the date hereof and, except as required by applicable securities law, Paramount undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.FOR FURTHER INFORMATION PLEASE CONTACT: J.H.T. (Jim) RiddellParamount Resources Ltd.President and Chief Operating Officer(403) 290-3600(403) 262-7994 (FAX)ORB.K. (Bernie) LeeParamount Resources Ltd.Chief Financial Officer(403) 290-3600(403) 262-7994 (FAX)