TIDMSOUC
RNS Number : 4243T
Southern Energy Corp.
24 November 2021
Defined terms used in this announcement have the same meaning
given to them as defined in the Company's announcement released at
17:47 (BST) on 28 October 2021 unless otherwise defined herein.
SOUTHERN ENERGY CORP. ANNOUNCES CLOSING OF
EQUITY FINANCING AND OPERATIONAL UPDATE
Calgary, Alberta - November 24 , 2021 - Southern Energy Corp.
("Southern" or the "Company") (SOU: TSXV) (AIM: SOUC), a
U.S.-focused, growth-oriented natural gas producer, is pleased to
announce the closing of its previously announced equity financing
for aggregate gross proceeds of c. US$10.1 million through the
offering of 254,304,014 Common Shares.
Highlights of Equity Raise:
-- Equity financing raised combined gross proceeds of c.US$10.1 million:
o c. US$4.7 million via a Prospectus Offering of 119,248,000
Common Shares at a price of C$0.05 per Common Share, settlement in
respect of which is expected to occur pre-market in Canada on
November 24, 2021;
o c. US$3.7 million via a Placing of 93,389,349 new Common
Shares at a price of 2.94 pence per Common Share; and
o c. US$1.6 million via a direct subscription with the Company
for 41,666,665 new Common Shares at a price of 2.94 pence per
Common Share
(together, the "Offering Shares")
-- As previously announced, the net proceeds of the Offering
will be used to drill up to three horizontal Selma Chalk wells in
the Gwinville field, anticipated to begin in Q4 2021 and for
working capital and general corporate purposes
o Subject to successful completion, first production from the
wells is expected in Q1 2022
-- Participants in the Offering include both new and existing
institutional shareholders, as well as certain directors and senior
managers of the Company
-- Completion of the equity financing introduced new UK-based
investors and is expected to provide additional liquidity to the
Company's Common Shares on AIM
Operational Update:
-- The Company has completed a series of low-cost well
recompletions and workovers during Q3 and Q4 2021
o Work program had an overall cost of c.US$0.8 million (US$0.7
million in Q3 2021) and added c.1,250 Mcfe/d (208 boe/d) of
production (c.80% natural gas), comprised of 39 bb/d of light and
medium crude oil, 2 bbl/d of NGLs and 1,000 mcf/d of conventional
natural gas.
o At current strip pricing, the program is expected to break
even in 4-5 months and add more than US$1.3 million of corporate
cash flow thereafter in 2022.
Ian Atkinson, President and CEO of Southern, commented :
"We are delighted with the result of our equity financing and
the support shown by new and existing shareholders.
"In preparation for the upcoming drilling program, funded by
today's equity raise, we have secured an experienced drilling rig,
crew and necessary materials and services with drilling anticipated
to begin shortly.
"Following on strong operational results in Q3 and Q4, these
Gwinville wells will have short payback and are strategically
located in proximity to the Henry Hub terminal which attracts
premium regional gas pricing. The Gwinville program is expected to
provide additional near-term cash flow to the business during a
period of strong commodity prices, and we look forward to updating
shareholders in due course as the program progresses."
Admission and Total Voting Rights
As previously announced, admission of 250,000,014 new Common
Shares, which are credited as fully paid and will rank pari passu
in all respects with the existing Common Shares, is expected to
take place at 8:00a.m. (GMT) this morning (" Admission ").
Following Admission, the total number of Common Shares in the
Company in issue will be 612,597,068. This figure may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in the Company.
Application has been made for an additional 4,304,000 new Common
Shares, to be issued pursuant to the Prospectus Offering, to be
admitted to trading on AIM (the " Further Admission "). The Further
Admission is expected to take place on our around 8:00a.m. GMT on
29 November 2021. Following the Further Admission, the total number
of Common Shares in the Company in issue will be 616,901,068 (the "
Enlarged Share Capital "). Following the Further Admission, this
Enlarged Share Capital figure may be used by shareholders as the
denominator for the calculations by which they will determine if
they are required to notify their interest in, or a change to their
interest in the Company.
Notification of Major Holdings
In accordance with the Company's constitution, save for where
there may be legal exemption, shareholders are required to disclose
to the Company any interests in its common shares over three per
cent. of the Company's voting rights from time to time.
Following completion of the Offering and admission of the
Offering Shares to trading on AIM and the TSXV, the Company's
shareholders with an interest in over 3 per cent of the Company's
voting rights are expected to be as follows:
Common Shares
held (following Percentage
completion of of Enlarged
Investor the Offering) Share Capital
Alberta Investment Management Corporation 51,443,484 8.34%
----------------- ---------------
DSS Holdings Inc. 41,308,000 6.70%
----------------- ---------------
Portillion Capital 37,414,966 6.06%
----------------- ---------------
Vestcor Inc. 35,338,597 5.73%
----------------- ---------------
Ian Atkinson 28,875,000 4.68%
----------------- ---------------
Shard Capital 20,408,163 3.31%
----------------- ---------------
AlphaNorth Partners Fund Inc. 19,500,000 3.16%
----------------- ---------------
For further information, please contact :
Southern Energy Corp.
Ian Atkinson (President and CEO) +1 587 287 5401
Calvin Yau (VP Finance and CFO) +1 587 287 5402
Strand Hanson Limited - Nominated & Financial
Adviser +44 (0) 20 7409
James Spinney / James Bellman 3494
Hannam & Partners - Joint Broker & Joint
Bookrunner +44 (0) 20 7907
Samuel Merlin / Ernest Bell 8500
Canaccord Genuity - Joint Broker & Joint
Bookrunner +44 (0) 20 7523
Henry Fitzgerald-O'Connor / James Asensio 8000
Camarco +44 (0) 20 3757
James Crothers, Billy Clegg, Daniel Sherwen 4980
Notes to editors:
About Southern Energy Corp.
Southern Energy Corp. is a natural gas exploration and
production company. Southern has a primary focus on acquiring and
developing conventional natural gas and light oil resources in the
southeast Gulf States of Mississippi, Louisiana, and East Texas.
Our management team has a long and successful history working
together and have created significant shareholder value through
accretive acquisitions, optimization of existing oil and natural
gas fields and the utilization of re-development strategies
utilizing horizontal drilling and multi-staged fracture completion
techniques.
Forward Looking Statements
Certain information included in this Announcement constitutes
forward-looking information under applicable securities
legislation. 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 Announcement may include, but
is not limited to, statements concerning the use of proceeds of the
Offering, the Company's business strategy, objectives, strength and
focus and the Company's capital program for the remainder of
2021.
The forward-looking statements contained in this Announcement
are based on certain key expectations and assumptions made by
Southern, including the timing of and success of future drilling,
development and completion activities, the performance of existing
wells, the performance of new wells, the availability and
performance of facilities and pipelines, the geological
characteristics of Southern's properties, the characteristics of
its assets, the successful application of drilling, completion and
seismic technology, benefits of current commodity pricing hedging
arrangements, prevailing weather conditions, prevailing legislation
affecting the oil and gas industry, commodity prices, royalty
regimes and exchange rates, the application of regulatory and
licensing requirements, the availability of capital, labour and
services, the creditworthiness of industry partners and the ability
to source and complete asset acquisitions.
Although Southern believes that the expectations and assumptions
on which the forward- looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Southern can give no assurance that they will
prove to be correct. Since forward-looking statements 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 risk
that the Company may apply the proceeds of the Offering differently
than as stated herein depending on future circumstances; risks
associated with the oil and gas industry in general (e.g.,
operational risks in development, exploration and production; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks), constraint in the availability of
services, negative effects of the current COVID-19 pandemic,
commodity price and exchange rate fluctuations, changes in
legislation impacting the oil and gas industry, adverse weather or
break-up conditions and uncertainties resulting from potential
delays or changes in plans with respect to exploration or
development projects or capital expenditures. These and other risks
are set out in more detail in the Preliminary Prospectus and
Southern's most recent management's discussion and analysis and
annual information form, which are available under the Company's
SEDAR profile at www.sedar.com.
The forward-looking information contained in this Announcement
is made as of the date hereof and Southern 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 Announcement is expressly qualified
by this cautionary statement.
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Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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