CALGARY, March 5, 2014 /CNW/ - ("KEL" - TSX) - Kelt
Exploration Ltd. ("Kelt" or the "Company") has agreed to increase
the brokered equity financing announced earlier today.
Revised Brokered Private Placement
Kelt has entered into a revised agreement with a syndicate of
underwriters led by Peters & Co. Limited (collectively the
"Underwriters"), pursuant to which the Underwriters have agreed to
purchase for resale to the public, on a bought deal private
placement basis, 8.5 million common shares of Kelt at a price of
$11.60 per common share, resulting in
gross proceeds of $98.6 million and
in addition, the Underwriters have agreed to sell to the public, on
a guaranteed agency basis, 1.53 million common shares (increased
from 730,000 common shares) of Kelt on a "flow-through" basis in
respect of Canadian development expenses at a price of $12.75 per flow-through common share resulting in
additional gross proceeds of $19.5
million (increased from $9.3
million).
Kelt has also granted the Underwriters an option, exercisable
for a period commencing at closing of the offering and ending 30
days following closing of the offering, to purchase an additional
1.275 million common shares at the same common share offering price
of $11.60 per common share, which if
exercised, would increase the common share offering gross proceeds
by $14.8 million. The financing is
expected to close on or around March 25,
2014.
Non-brokered Private Placement
In conjunction with the aforementioned brokered private
placement, Kelt has agreed to issue to certain directors, officers
and employees of the Company, on a non-brokered basis, an
additional 1.105 million common shares of Kelt on a "flow-through"
basis in respect of Canadian development expenses at a price of
$12.75 per flow-through common share,
resulting in additional proceeds of $14.1
million. The non-brokered private placement will close
concurrently with the closing of the brokered private placement on
or around March 25, 2014.
Private Placements
Net proceeds from these private placement equity offerings
(collectively, the "Private Placements") will be used to partially
finance the increased 2014 capital expenditure programs and for
general working capital purposes.
Kelt shall, pursuant to the provisions in the Income Tax
Act (Canada), incur eligible
Canadian development expenses, (the "Qualifying Expenditures")
after the Closing Date (as defined below) and prior to December 31, 2014 in the aggregate amount of not
less than the total amount of the gross proceeds raised from the
issue of flow-through common shares. Kelt shall renounce the
Qualifying Expenditures so incurred to the purchasers of the
flow-through common shares in an amount equal to $12.75 per flow-through common share on or prior
to December 31, 2014.
This transaction is subject to certain conditions including
normal regulatory approvals and specifically, the approval of the
Toronto Stock Exchange. The common
shares and flow-through common shares will be offered in the
provinces of British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Quebec and such other provinces as may be
agreed to between Kelt and the Underwriters by way of private
placement. The Kelt common shares issued in connection with the
Private Placements are subject to a statutory hold period of four
months plus one day from the date of completion of the Private
Placements, in accordance with applicable securities
legislation.
The common shares may also be placed privately in the United States with certain qualified
institutional buyers pursuant to Rule 144A of the Securities Act of
1933 and with certain accredited institutional investors under
Regulation D.
This press release does not constitute an offer to sell or a
solicitation of any offer to buy the common shares in the United States. The common shares have not
been and will not be registered under the U.S. Securities Act of
1933 and may not be offered or sold in the United States absent registration or an
applicable exemption from the registration requirements of such
Act.
Financial Position
After giving effect to the increased capital spending and after
giving effect to the Private Placements, Kelt estimates that it
will have bank debt, net of working capital, of approximately
$17.9 million at the end of 2014. As
a result, the Company expects to have sufficient financial
flexibility to carry out its operations during 2014 and may pursue
other opportunities, as they occur.
About Kelt
Kelt is a Calgary, Alberta,
Canada-based oil and gas company focused on exploration,
development and production of crude oil and natural gas resources,
primarily in west central Alberta
and northeastern British
Columbia.
Cautionary Statement and Advisory Regarding Forward-Looking
Statements and Information
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "objective", "ongoing",
"may", "will", "project", "should", "believe", "plans", "intends"
and similar expressions are intended to identify forward-looking
information or statements. In particular, this press release
contains forward-looking statements concerning the ongoing
operations of Kelt, expected bank debt net of working capital at
the end of 2014 and the use of proceeds from the Private
Placements.
Although Kelt 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 Kelt cannot give any 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
failure to obtain necessary regulatory approvals for planned
operations and 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; health, safety and
environmental risks; commodity price and exchange rate
fluctuations; and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development
projects or capital expenditures).
The forward-looking statements contained in this press release
are made as of the date hereof and Kelt does not undertake any
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws. Please refer to Kelt's Annual Information Form
dated March 28, 2013 for additional
risk factors relating to Kelt which is available for viewing on
www.sedar.com.
Certain information set out herein may be considered as
"financial outlook" within the meaning of applicable securities
laws. The purpose of this financial outlook is to provide readers
with disclosure regarding Kelt's reasonable expectations as to the
anticipated results of its proposed business activities for the
periods indicated. Readers are cautioned that the financial outlook
may not be appropriate for other purposes.
SOURCE Kelt Exploration Ltd.