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Press release from Marketwire

Niko Resources Ltd. Announces Cdn$252 million of Offerings of Common Shares and Convertible Unsecured Senior Notes and Refinancing Plan for Outstanding Convertible Debentures

Thursday, November 15, 2012

Niko Resources Ltd. Announces Cdn$252 million of Offerings of Common Shares and Convertible Unsecured Senior Notes and Refinancing Plan for Outstanding Convertible Debentures16:13 EST Thursday, November 15, 2012CALGARY, ALBERTA--(Marketwire - Nov. 15, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATESNiko Resources Ltd. ("Niko" or the "Company") (TSX:NKO) is pleased to announce that it has reached an agreement with a syndicate of underwriters (the "Underwriters") led by RBC Capital Markets pursuant to which Niko has agreed to issue, on a "bought deal" basis (i) 12,000,000 Niko common shares (the "Common Shares") at Cdn$8.50 per Common Share for gross proceeds of Cdn$102 million and (ii) Cdn$100 million principal amount of convertible unsecured senior notes (the "Notes") at a price of Cdn$1,000 per Note for aggregate gross proceeds of Cdn$202 million (collectively, the "Offering"). The Company has also granted the Underwriters an over-allotment option to purchase up to an additional 1,800,000 Common Shares and Cdn$10 million principal amount of Notes on the same terms and conditions, exercisable in whole or in part at any time following closing of the Offering for a period of 30 days.Niko has also agreed to issue 5,882,400 Niko common shares at Cdn$8.50 per common share via a separate concurrent Cdn$50 million offering (the "Concurrent Offering") to Maju Investments (Mauritius) Pte. Ltd., the primary holder of the Company's outstanding Cdn$310 million of convertible debentures due December 30, 2012 (the "Outstanding Debentures"). Net proceeds of the Offering and the Concurrent Offering, along with cash on hand and advances under the Company's credit facility, will be used to repay the Outstanding Debentures in full. Subject to certain conditions, the Outstanding Debentures are expected to be prepaid at par plus accrued interest upon closing of the Offering. Closings of the Offering and the Concurrent Offering are conditional on each other and are expected to occur on or about December 4, 2012. The closings are also subject to certain other conditions including, but not limited to, the receipt of all necessary approvals, including approval of the Toronto Stock Exchange. As previously disclosed the Company is currently in negotiations with various third parties regarding farm-outs, non core asset dispositions and other arrangements that have the potential to provide additional proceeds of US$135 million during the year ended March 31, 2013 and the Company is in preliminary discussions with additional third parties regarding further farm-outs and/or dispositions of certain non-core assets. With the successful closings of the offerings and repayment of the Outstanding Debentures, Niko is confident that the combination of ongoing funds from operations from its producing properties and the proceeds it expects to receive in the next several months from some or all of the farm-outs, asset dispositions and other arrangements that the Company has been working on will provide appropriate ongoing liquidity to fund the Company's business plan through fiscal 2013 and fiscal 2014. Assuming successful completion of these initiatives, the Company does not plan to issue additional equity to fund its fiscal 2013 or fiscal 2014 business plan.Further Information on the Offerings The Notes will mature and be repayable on December 31, 2017 (the "Maturity Date") and will accrue interest from the date of issue at 7.00% per annum, with interest payable semi-annually in arrears on June 30 and December 31 each year (each an "Interest Payment Date") commencing June 30, 2013. At the holder's option, at any time prior to close of business on the earlier of the business day immediately preceding the Maturity Date and the last business day immediately preceding the date fixed for redemption, the Notes may be converted into common shares of Niko at a conversion price of Cdn$11.30 per share (the "Conversion Price") representing a conversion ratio of 88.4956 common shares for each Cdn$1,000 principal amount of Notes, subject to certain anti-dilution provisions. Holders who convert their Notes will receive accrued and unpaid interest for the period from the date of the latest Interest Payment Date to the date of conversion.The Notes will not be redeemable by the Company prior to or on December 31, 2015. On and after January 1, 2016 and prior to December 31, 2017, the Notes may be redeemed by the Company, in whole or in part from time to time, provided that the weighted average trading price of the common shares on the TSX for the 20 consecutive trading days ending five trading days prior to the date on which notice of redemption is provided is at least 130% of the Conversion Price. The Common Shares and Notes will be offered by Niko under a short form prospectus to be filed in each of the provinces of Canada, other than Québec. The common shares offered pursuant to the Concurrent Offering will be qualified under a separate short form prospectus to be filed in the provinces of Alberta and Ontario. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Niko in the United States. The common shares and Notes described in this press release (and any common shares of Niko issued upon the conversion, redemption or maturity of the Notes) have not been and will not be registered under the United States Securities Act of 1933, as amended, or the securities laws of any state and may not be offered, sold or delivered in the United States absent an exemption from registration.November 15, 2012Forward-Looking Information Certain statements in this press release constitute forward-looking information. Specifically, this press release contains forward looking information relating to the refinancing plan for the outstanding convertible debentures, additional sources of funding from farm-outs, asset dispositions and other arrangements, sources of funding for the Company's 2013 and 2014 business plan and guidance regarding the year ended March 31, 2013. These forward looking statements are based on certain key expectations and assumptions, including management's estimates of future commodity sales prices, estimates of future sales, production and deliveries, estimated amounts and timing of capital expenditures, the ability to complete contemplated farm-outs, asset dispositions or other arrangements, anticipated operating costs, royalty rates, cash flows, transportation plans and capacity, anticipated access to infrastructure, or other expectations regarding future events. The reader is cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors and such variations may be material. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil and gas prices; the results of exploration and development drilling and related activities; the uncertainty of estimates and projections relating to production, costs and expenses; uncertainties as to the availability and cost of financing, including an inability to complete currently anticipated farm-outs, asset sales or other arrangements; fluctuations in currency exchange rates; the imprecision in reserve estimates; risks associated with oil and gas operations, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the weather in our area of operations; the ability of suppliers to meet commitments; changes in environmental and other regulations; actions by governmental authorities including changes in laws and increases in taxes; decisions or approvals of judicial or administrative tribunals; risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action); the effect of acts of, or actions against international terrorism; uncertainties associated with negotiations with commercial parties; risks and uncertainties associated with the debt and equity capital markets; and other factors, many of which are beyond our control. Niko makes no representation that the actual results achieved during the forecast period will be the same in whole or in part as those forecast. FOR FURTHER INFORMATION PLEASE CONTACT: Contact Information: Niko Resources Ltd.Edward SampsonChairman of the Board, President & CEO(403) 262-1020Niko Resources Ltd.Murray HesjeVP Finance & CFO(403) 262-1020www.nikoresources.com