NAL Oil & Gas Trust
TSX : NAE.UN

NAL Oil & Gas Trust

November 24, 2009 16:19 ET

NAL Oil & Gas Trust Announces $100 Million Convertible Debenture Offering

CALGARY, ALBERTA--(Marketwire - Nov. 24, 2009) –

NOT FOR RELEASE OVER US NEWSWIRE SERVICES OR DISSEMINATION IN THE US.

NAL Oil & Gas Trust (the "Trust" or "NAL") (TSX:NAE.UN) has entered into an agreement with a syndicate of underwriters led by RBC Capital Markets and BMO Capital Markets to sell to the public, on a bought deal basis, $100 million principal amount of 6.25% convertible unsecured subordinated debentures (the "Debentures"). NAL has also granted the underwriters an Over–Allotment Option to purchase up to an additional $15 million of Debentures at the same offering price, exercisable in whole or in part for a period of 30 days following closing. If the Over-Allotment Option is fully exercised, the total gross proceeds to NAL from the sale of Debentures will be approximately $115 million. Closing is expected to occur on or about December 3, 2009.

NAL will use the net proceeds of this financing to repay outstanding bank indebtedness, for general corporate purposes and to retain financial flexibility to take advantage of market opportunities going forward.

The Debentures have a face value of $1,000 per debenture, a coupon of 6.25%, a maturity date of December 31, 2014, and will be convertible into Trust Units at the option of the holder at a conversion price of $16.50 per Trust Unit. The Debentures will pay interest semi-annually in arrears on June 30 and December 31 of each year, commencing June 30, 2010. The Debentures will not be redeemable on or before December 31, 2012. From January 1, 2013 to December 31, 2013, the Debentures may be redeemed in whole or in part from time to time at the option of the Trust on not more than 60 days and not less than 30 days prior notice, at a redemption price of $1,050 per Debenture, plus accrued and unpaid interest thereon, if any. From January 1, 2014 to maturity, the Debentures may be redeemed in whole or in part from time to time at the option of the Trust on not more than 60 days and not less than 40 days prior notice at a redemption price of $1,025 per Debenture, plus accrued and unpaid interest thereon, if any. 

The Debentures will be issued by way of a prospectus supplement that will be filed with securities regulatory authorities in all provinces of Canada under NAL's short form base shelf prospectus dated May 15, 2009, which was previously filed with securities regulatory authorities in each province in Canada.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

Cautionary Statement Regarding Forward-Looking Information

Statements about the Trust's expectations and all other statements in this news release, other than historical facts, are "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information relies on a number of assumptions concerning future events and is subject to a number of uncertainties and factors, many of which are outside of the Trust's control, which could cause actual results to differ materially from such statements. Forward-looking information in this news release includes, but is not limited to, the successful completion of the offering and the use of the proceeds from the offering. No assurance can be given that any of the events anticipated by the forward-looking information and statements will transpire or occur or, if any of them does so, what benefit the Trust will derive from them.

NAL Oil & Gas Trust provides investors with a yield-oriented opportunity to participate in the Canadian Upstream Conventional Oil and Gas Industry. The Trust generates monthly cash distributions for its Unitholders by pursuing a strategy of acquiring, developing, producing and selling crude oil, natural gas and natural gas liquids from pools in southeastern Saskatchewan, central Alberta, northeastern British Columbia and Lake Erie, Ontario. Trust units trade on the Toronto Stock Exchange under the symbol "NAE.UN".

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