Raging River Exploration (RRX-T) announces $77 million bought deal financing and increased 2015 exit guidance
Jan 14, '15 - NR
Raging River Exploration is pleased to announce that it has entered into a bought deal agreement with a syndicate of underwriters co-led by Peters & Co. Limited and FirstEnergy Capital Corp. Raging River will issue 12,000,000 common shares at $6.40 per Common Share for gross proceeds of $76,800,000. The underwriters will have an option to purchase up to an additional 15% of the Common Shares issued under the Offering at a price of $6.40 per Common Share to cover over-allotments, exercisable in whole or in part at any time until 30 days after the closing date. The maximum gross proceeds that could be raised under the Offering is approximately $88.3 million should the over-allotment option be exercised in full.
The net proceeds from the Offering will be initially used to temporarily reduce indebtedness, partially fund the Company's 2015 capital expenditure program and for general corporate purposes.
The Offering will be completed by way of short form prospectus in certain provinces of Canada, except Quebec and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended, (the "U.S. Securities Act"). The Offering is subject to normal regulatory approvals and is expected to close on or about February 4, 2015.
Reaffirmation of 2015 Budget and Increased Exit Guidance
Raging River is re-affirming its full year capital program of $175 million.
During the first half of 2015, the capital expenditure budget has been reduced by $10 million to $60 million which is equivalent to estimated first half 2015 cash flow using a crude oil price of US$50/bbl WTI. Deferring this capital to the second half of 2015 will allow us take advantage of the anticipated 10% to 20% decrease in well costs associated with expected decrease in service costs. During the second half of 2015 the expected savings will result in the Company drilling an incremental 15 to 20 wells above our previously released guidance.
With the increased well count, we have increased our targeted exit production rate to 14,500 boe/d while maintaining our average production guidance for the year of 13,100 boe/d.
The business approach taken by the Company since our inception 3 years ago has been to prudently manage our balance sheet while maintaining meaningful per share growth in addition to developing an enviable drilling inventory. Our established drilling inventory of approximately 2,400 locations has set the Company up to endure in these times of depressed commodity prices. The increased financial flexibility achieved with the Offering will continue to allow us to be opportunistic on incremental acquisitions and drilling opportunities throughout the upcoming year.
Raging River remains enthusiastic about the future of the Company. The business will continue to pursue value added property, land and corporate acquisitions in addition to building on our base business through the drill bit.
Additional corporate information can be found in our website at www.rrexploration.com or on www.sedar.com.
RAGING RIVER EXPLORATION INC.,
Mr. Neil Roszell, P. Eng., President and Chief Executive Officer,
Tel: 403-767-1250;
Fax: 403-387-2951;
RAGING RIVER EXPLORATION INC.,
Mr. Jerry Sapieha, CA, Vice President, Finance and Chief Financial Officer,
Tel: 403-767-1265;
Fax: 403-387-2951 |
