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Press release from Marketwire

Caza Oil & Gas Announces the Closing of $4,340,000 Convertible Loan

Tuesday, November 05, 2013

Caza Oil & Gas Announces the Closing of $4,340,000 Convertible Loan

02:00 EST Tuesday, November 05, 2013

HOUSTON, TEXAS--(Marketwired - Nov. 5, 2013) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.

Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ)(AIM:CAZA) is pleased to announce that it has entered into an agreement in relation to a $4.3 million convertible unsecured loan (the "Loan") to be made available by YA Global Master SPV Ltd., an investment fund managed by Yorkville Advisors LLC ("Yorkville"). The Loan consists of $3.5 million of new credit facilities along with an additional $0.84 million that will be used to repay amounts which remain outstanding under the prior loan from Yorkville. Caza intends to use the funds from the Loan, together with funds available pursuant to its debt facility with Apollo Investment Management, to continue its leasing and drilling program in the Bone Spring Play in Lea and Eddy Counties in Southeastern New Mexico.

W. Michael Ford, Chief Executive Officer commented:

"We're pleased to announce this financing, which continues our good relationship with Yorkville. The capital associated with the financing benefits Caza by lowering the cost of capital associated with the previous YA Global loan facility, and providing Caza with additional flexibility when deploying capital in the Bone Spring Play."

"The Bone Spring Play is the most exciting oil and natural gas play in the US today, and we feel it is very important to expand our prospect portfolio in the short term, while prospective leases are still available. Currently, the Apollo facility does not provide capital for leasing. Therefore, a portion of this financing will provide Caza the necessary flexibility to be competitive at upcoming New Mexico lease sales, which should translate into added shareholder value."

Description of the Loan Agreement

Outstanding principal of the Loan is convertible at Yorkville's option into Common Shares of the Company. The conversion price, which will be determined at the date of each conversion, will be a price per Common Share equal to either (a) 92.5% of the average price of the Common Shares during the 10 trading days prior to the conversion (such conversion being restricted to a maximum of $450,000 per month) or (b) at Yorkville's option, a fixed price of £0.14 (such conversion being subject to no maximum amount). The Loan bears interest on outstanding principal at 8% per annum, which interest is payable quarterly only in Common Shares based on a conversion price equal to 92.5% of the average price of the Common Shares during the 10 trading days prior to the interest payment date. The Loan will mature in two years, which may be extended to three years by Yorkville. At maturity, the outstanding principal balance will mandatorily convert into Common Shares at a conversion price equal to the closing price of the Common Shares on the preceding trading day.

The Loan may be prepaid by Caza in whole in cash at any time at a price of 120% of the principal amount then outstanding. The Loan agreement provides for customary events of default. Upon Yorkville's declaration of a default, the outstanding principal balance and accrued interest will generally convert into Common Shares at a conversion price equal to 80% of the average closing price of the Common Shares on the five preceding trading days, although the loan may become immediately due and payable in certain circumstances.

In connection with the Loan, Yorkville received an 8% implementation fee and three-year warrants to purchase 2,529,333 Common Shares at an exercise price of US$0.17 per share.

Issuances of Common Shares to Yorkville under the Loan will be delayed in certain circumstances if the issuance would result in Yorkville owning (assuming the exercise of all conversion rights) more than 10% of the outstanding Common Shares.

About Caza

Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the following regions of the United States of America through its subsidiary, Caza Petroleum, Inc.: Permian Basin (West Texas and Southeast New Mexico) and Texas and Louisiana Gulf Coast (on-shore).

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

ADVISORY STATEMENT

Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "schedule", "continue", "estimate", "expect", "may", "will", "hope", "project", "predict", "potential", "intend", "could", "might", "should", "believe", "develop", "test", "anticipate", "enhance" and similar expressions. In particular, information regarding the price, issuance, conversion and admission to trading of Common Shares and the use of proceeds contained in this news release constitutes forward-looking information within the meaning of securities laws.

Such forward looking information is subject to certain risks, assumptions and uncertainties including the assumption that the price, issuance and admission to trading of Common Shares disclosed herein shall be completed in accordance with the Loan. For more exhaustive information on these risks, assumptions and uncertainties you should refer to the Company's most recently filed annual information form which is available at www.sedar.com and the Company's website at www.cazapetro.com. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as may be required by securities laws.

This news release is not for dissemination in the United States or to any United States news services. The New Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the " U.S. Securities Act ") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful.

FOR FURTHER INFORMATION PLEASE CONTACT:

Contact Information:
Caza Oil & Gas, Inc.
Michael Ford
CEO
+1 432 682 7424


Caza Oil & Gas, Inc.
John McGoldrick
Chairman
+65 9731 7471 (Singapore)
www.cazapetro.com


Cenkos Securities plc
Jon Fitzpatrick
+44 20 7397 8900 (London)


Cenkos Securities plc
Neil McDonald
+44 131 220 6939 (Edinburgh)


VSA Capital Limited
Andrew Raca
+44 20 3005 5004


VSA Capital Limited
Malcolm Graham-Wood
+44 20 3005 5012


VIGO Communications
Chris McMahon
+44 20 7016 9570

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