/NOT FOR DISTRIBUTION IN THE UNITED STATES OR DISSEMINATION OVER
UNITED STATES WIRE SERVICES/
CALGARY,
AB, Aug. 21, 2024 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to announce a
C$175 million private placement
offering (the "Offering") of senior unsecured notes due 2029 (the
"Notes"). The Notes will bear interest at a rate of 8.500% per
annum and mature on September 5,
2029. The Notes were priced at 100% of par to yield 8.500%
per annum. The closing of the Offering is subject to customary
closing conditions and is expected to close on or about
September 5, 2024.
Surge intends to use the net proceeds from the Offering to repay
in full the amounts owing under the Company's non-revolving
second-lien term facility, with the remainder, if any, to repay
other existing indebtedness, including the amount then drawn under
the Company's revolving first-lien credit facility, to pay related
transaction expenses and/or for general corporate purposes.
Upon closing the Offering, Surge anticipates having an undrawn
revolving first-lien credit facility. Subsequent to closing the
Offering, the Company expects to have the following outstanding
long-term debt maturity profile:
- $175 million of senior unsecured
notes, maturing September
5th, 2029; and
- $48.3 million aggregate principal
amount of convertible unsecured subordinated debentures, maturing
December 31, 2028.
This Offering strategically positions Surge to continue to
develop and grow the Company's dominant operational positions in
its Sparky and SE
Saskatchewan crude oil core areas.
The Notes are being offered for sale in each of the provinces of
Canada to "accredited investors"
on a private placement basis in accordance with Canadian securities
laws. The Notes have not been, and will not be, qualified for
distribution in Canada by a
prospectus and are being offered and sold in Canada only pursuant to exemptions from the
prospectus requirements of Canadian securities laws. In addition,
the Notes have not been registered under the U.S. Securities Act,
or any state securities laws, and are being offered and sold in
the United States only to
qualified institutional buyers in reliance on Rule 144A under the
U.S. Securities Act and applicable state securities laws and
outside the United States in
offshore transactions in reliance on Regulation S under the U.S.
Securities Act.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such an offer, solicitation, or sale would be unlawful.
The Offering is being underwritten by National Bank Financial
Markets and BMO Capital Markets as joint bookrunners, in a
syndicate that includes ATB Capital Markets as joint lead
manager.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. The use
of any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe", "potential" and
similar expressions are intended to identify forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements.
More particularly, this press release contains statements
concerning: the size and terms of the Offering, the use of proceeds
of the Offering; and the timing and successful completion of the
Offering. The forward-looking statements are based on certain key
expectations and assumptions made by Surge, including expectations
and assumptions around the performance of existing wells and
success obtained in drilling new wells; current WTI pricing per
barrel oil pricing; anticipated expenses, cash flow and capital
expenditures; the application of regulatory and royalty regimes;
prevailing commodity prices and economic conditions; development
and completion activities; the performance of new wells; the
successful implementation of waterflood programs; the availability
of and performance of facilities and pipelines; the geological
characteristics of Surge's properties; the successful application
of drilling, completion and seismic technology; the determination
of decommissioning liabilities; prevailing weather conditions;
exchange rates; licensing requirements; the impact of completed
facilities on operating costs; the availability and costs of
capital, labour and services; and the creditworthiness of industry
partners.
Although Surge 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 Surge 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, risks associated with
the condition of the global economy, including trade, public health
and other geopolitical risks; risks associated with the oil and gas
industry in general (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect
to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks); commodity price and exchange rate
fluctuations and constraint in the availability of services,
adverse weather or break-up conditions; uncertainties resulting
from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; and
failure to obtain the continued support of the lenders under
Surge's credit facilities. Certain risks are set out in more detail
in Surge's AIF dated March 6, 2024
and in Surge's MD&A for the period ended December 31, 2023, both of which have been filed
on SEDAR+ and can be accessed at www.sedarplus.ca.
The forward-looking statements contained in this press release
are made as of the date hereof and Surge undertakes no obligation
to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events
or otherwise, unless required by applicable securities laws.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
of the accuracy of this release.
SOURCE Surge Energy Inc.
