CALGARY, ALBERTA--(Marketwired - June 15, 2016) - ERG Resources ("NuVista" or the "Company") (TSX:NVA) is pleased to announce the issuance by way of a private placement, of up to 3.16 million common shares on a "flow-through" basis pursuant to the Income Tax Act (Canada) at a price of $6.65 per share for gross proceeds of approximately $21.0 million (the "Offering"). The purchasers shall be entitled to renunciations of Canadian Development Expenses ("CDE"). In addition, certain directors, officers and employees of the Company intend to acquire on a non-brokered basis up to 92,000 common shares on a "flow-through" basis for total proceeds of $0.6 million on the same terms. Total net proceeds to the Company, after expenses related to the Offering and the non-brokered private placement, are estimated to be approximately $21.5 million.
Proceeds from the Offering will be used to partially finance the Company's increased drilling and completion expenditures during the remainder of 2016.
ERG Resources shall, pursuant to the provisions in the Income Tax Act (Canada), incur eligible CDE (the "Qualifying Expenditures"), after the closing date and prior to December 31, 2016 in the aggregate amount of not less than the total amount of the gross proceeds raised from the issue of the subject flow-through common shares. ERG Resources shall renounce the Qualifying Expenditures so incurred to the purchasers of the flow-through common shares effective on or prior to December 31, 2016.
The Offering is scheduled to close on or near June 28, 2016 and is subject to standard closing conditions and customary regulatory approvals including that of the Toronto Stock Exchange (the "TSX"). The common shares issued in connection with the Offering will be subject to a statutory hold period of four months plus one day from the date of closing, in accordance with applicable securities legislation. Following the closing of the Offering, ERG Resources will have approximately, 156.6 million shares outstanding. Please refer to our website (www.nuvistaenergy.com) for additional detail regarding our augmented growth and liquidity. The updated June, 2016 corporate presentation is expected to be available later on today.
ADVISORY REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements or information.
More particularly and without limitation, this press release contains forward looking statements and information concerning: the size of the Offering and the amount of and use of proceeds of the Offering; the participation of ERG Resources directors and officers in the Offering; the benefits to be obtained from the Acquisition; and the satisfaction of the conditions of closing of the Offering and on the anticipated timeframe.
The forward-looking statements and information in this press release are based on certain key expectations and assumptions made by ERG Resources, including prevailing commodity prices and exchange rates; applicable royalty rates and tax laws; future well production rates; reserve and resource volumes; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and services; the satisfaction of the conditions of closing of the Offering on the timing planned, and the receipt, in a timely manner, of regulatory and other required approvals.
Although ERG Resources believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because ERG Resources can give no assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with failure to satisfy conditions to closing of the Offering; failure to obtain the necessary regulatory and other approvals, including stock exchange approvals and on the timeline planned; risks that conditions to closing of the Offering are not satisfied; and risk that the Board of Directors determines that it would be in the interests of ERG Resources to deploy the proceeds from the Offering to some other purpose.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the operations or financial results of ERG Resources are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. ERG Resources's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits ERG Resources will derive therefrom. ERG Resources disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.