CALGARY, AB, Feb. 16, 2021 /CNW/ - PetroShale Inc.
("PetroShale" or the "Company") (TSXV: PSH) (OTCQB:
PSHIF) today confirms that it has elected to exercise its right to
settle in kind the payment of the quarterly dividend due in
February on its outstanding US$75
million Series A preferred shares (the "Preferred Shares"),
which are held by First Reserve (the "Investor").
By electing to pay the fourth quarter of 2020 dividend in kind,
the ordinary cash dividend of approximately US$1.8 million (approximately CAD$2.4 million) will be settled by way of
increasing the current US$82.0
million liquidation preference of the Preferred Shares by
US$2.5 million (approximately
CAD$3.1 million). The liquidation
preference represents the dollar amount of the Preferred Shares
that will be settled or repaid in accordance with the terms of the
Preferred Shares. The payment in kind will enable PetroShale to
continue preserving liquidity and balance sheet strength as the
economy recovers from the impact of the COVID-19 pandemic. In
accordance with the terms of the Preferred Shares, the increase to
the liquidation preference increases the amount of voting and
exchange rights which accrue to the holder of the Preferred
Shares.
As a result, the Company will issue an additional 1,288,593
special voting shares to the Investor, and a further 1,288,593
common shares may be issuable on exchange of the Preferred Shares
(in which case the issued special voting shares will be cancelled).
Following this issuance, the Investor will own 2,702,702 common
shares and 44,241,698 special voting shares, representing
approximately 20.2% of the outstanding voting shares of the
Company. PetroShale originally negotiated this feature of the
Preferred Shares with the Investor to facilitate cash flow
management in a period of low commodity prices. The Company has the
ability to exercise this right a maximum of six times in aggregate
over the term ending January 2023.
PetroShale has previously elected to settle, in kind, its quarterly
dividends due in May, August and November of 2020. Prior to 2020,
the Company has settled each of its quarterly dividend payments on
the Preferred Shares in cash.
About PetroShale
PetroShale is an oil company engaged in the acquisition,
development and consolidation of interests in the North Dakota
Bakken / Three Forks.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Note Regarding Forward-Looking Statements and Other
Advisories
This document contains forward-looking information. This
information relates to future events and the Company's future
performance. All information and statements contained herein that
are not clearly historical in nature constitute forward-looking
information, and the words "may", "will", "should", "could",
"expect", "plan", "intend", "anticipate", "believe", "estimate",
"propose", "predict", "potential", "continue", "aim", or the
negative of these terms or other comparable terminology are
generally intended to identify forward-looking information. Such
information represents the Company's internal projections,
estimates, expectations, beliefs, plans, objectives, assumptions,
intentions or statements about future events or performance. This
information involves known or unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking
information. PetroShale believes that the expectations reflected in
this forward-looking information are reasonable; however, undue
reliance should not be placed on this forward-looking information,
as there can be no assurance that the plans, intentions or
expectations upon which they are based will occur. This press
release contains forward-looking information concerning, among
other things, PetroShale's intention with respect to paying its
quarterly dividend in kind, the effects of such in kind payment and
the anticipated benefits and effects of the Company by electing to
pay the dividend in kind. The reader is cautioned that such
information, although considered reasonable by the Company, may
prove to be incorrect. A number of risks and other factors could
cause actual results to differ materially from those expressed in
the forward-looking information contained in this document
including, but not limited to, the risk that the Company may not
realize the benefits or effects contemplated herein as a result of
the in kind dividend payment and the Company may not be able to
successfully execute its business strategy. Readers are cautioned
that the foregoing list of factors is not exhaustive. Although the
forward-looking statements contained in this document are based
upon assumptions which management of PetroShale believes to be
reasonable, PetroShale cannot assure investors that actual results
will be consistent with these forward-looking statements. With
respect to forward-looking statements contained in this document,
PetroShale has made assumptions regarding, among other things, the
effects of the payment of the in kind dividend, the current
business environment facing the Company, including commodity prices
and related matters and its business strategy. These
forward-looking statements are made as of the date of this document
and PetroShale disclaims any intent or obligation to update
publicly any forward-looking statements, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities laws.
SOURCE PetroShale Inc.
