CGX Energy (OYL-V) closes $37-million private placement - Longshot... On Watch list.
www.cgxenergy.com
April 26, 2013 - News Release
CGX Energy Inc. has closed its previously announced brokered private placement raising $37,008,900 by issuing 370,089,000 units at a price of 10 cents per unit. Each unit comprises one common share in the capital of the company and one common share purchase warrant of the company. Each warrant entitles the holder thereof to acquire one common share at any time until April 26, 2018, at an exercise price of 17 cents.
Pacific Rubiales Energy Corp. subscribed for 350 million units, which increases Pacific Rubiales's ownership of CGX to 494,434,285 common shares, representing approximately 63.2 per cent of the issued and outstanding shares in the capital of the company on a non-diluted basis. If Pacific Rubiales exercises all of the warrants, it would hold a total of 844,434,285 common shares, representing approximately 74.6 per cent of the issued and outstanding shares in the capital of the company.
As compensation for its services in connection with the offering, GMP Securities LP was paid a fee of 4 per cent on the subscription of units by Pacific Rubiales and 6 per cent on the subscription of units by other purchasers.
The securities issued in connection with the offering are subject to a statutory hold period of four months plus one day in accordance with applicable securities legislation. Completion of the offering is subject to receipt by the company of the final approval of the TSX Venture Exchange in connection therewith.
The net proceeds from the private placement, after payment of commissions and expenses related to the offering, will be used by CGX as follows:
- $15,332,469 (U.S.) owing to Repsol Exploracion SA, Tullow Guyana BV and YPF SA, pursuant to the joint operating agreement among the partners in relation to the Georgetown petroleum agreement;
- Up to a maximum of $2-million for change-of-control payments to officers, directors, employees and consultants of the company who are no longer with the company following closing of the offering;
- To finance expenditures related to the company's oil and gas exploration activities, and for general corporate purposes.
Board and management changes
In accordance with the subscription agreement entered into with Pacific Rubiales on March 25, 2013, the following individuals have been appointed to the board of directors of CGX: Serafino Iacono, co-chairman and director of Pacific Rubiales, Ronald Pantin, chief executive officer and director of Pacific Rubiales, and Dennis Mills, a director of Pacific Rubiales.
Resignations from the board include Kerry Sully, Denis Clement and Adrian Jackson. Suresh Narine, John Cullen and Dennis Pieters will remain on the board. Mr. Iacono and Mr. Narine will each act as co-chairman of the company.
Dewi Jones has been appointed to the position of CEO, and Michael Galego has been appointed general counsel and secretary. Kerry Sully, president and CEO, John Clarke, vice-president, corporate development, and Michael Stockinger, chief operating officer, have resigned effective April 26, 2013.
Mr. Jones was formerly with CGX as executive vice-president, exploration, until his resignation on Sept. 30, 2012. Mr. Jones is an upstream exploration and development professional with 27 years of technical and hands-on managerial experience focused on Latin America and the Caribbean. Mr. Jones began his career with Occidental Petroleum in his native country of Colombia and held several international technical positions in his 10-year tenure with Occidental Petroleum. He then held several senior technical and management positions with companies including Coastal Oil & Gas Corp., Pioneer Natural Resources and Samson International Ltd. before joining Repsol/YPF in 2004, where he served as exploration manager for the Caribbean region, including the Guyana-Suriname basin, and in the same capacity for the Pacific region of South America.
Mr. Galego has been a lawyer for more than six years, and he has been deputy general counsel and secretary for Pacific Rubiales since June, 2010. Prior to joining Pacific Rubiales, Mr. Galego acted as legal counsel to several public companies operating in the Latin American resource sector. Mr. Galego began his legal career as an associate in the business law department of Osler, Hoskin & Harcourt LLP.
Mr. Narine, co-chairman of the company, stated: "This financing heralds an exciting new chapter in CGX's partnership with the people and government of Guyana. I am delighted to welcome Pacific Rubiales to this partnership, as CGX's majority shareholder. With Pacific Rubiales's involvement, CGX looks forward to extending Pacific Rubiales's amazing 83-per-cent exploration success rate to the Guyana-Suriname basin. I am also especially pleased to welcome Dewi Jones back to the company as CEO. Dewi not only brings a wealth of experience to CGX, but also a deep understanding of the company and the Guyana-Suriname basin. In closing, I would like to take this opportunity on behalf of the board to thank Kerry Sully, Denis Clement and Adrian Jackson for their service to CGX and to wish them the best in their future endeavours."
We seek Safe Harbor.
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