Renegade Petroleum Ltd.
TSX VENTURE : RPL

Renegade Petroleum Ltd.

April 29, 2010 16:36 ET

Renegade Petroleum Ltd. Announces Closing of $40 Million Bought Deal Financing and Asset Acquisition

CALGARY, ALBERTA--(Marketwire - April 29, 2010) -

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR TO UNITED STATES NEWS WIRE SERVICES.

Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX VENTURE:RPL) is pleased to announce that it has completed its previously announced bought deal financing of subscription receipts (the "Subscription Receipt Offering") for gross proceeds to the Company of approximately $40 million. Renegade also announces it has closed its previously announced transaction to acquire certain oil and gas assets located in Saskatchewan (the "Assets") for consideration of approximately $33 million, net of adjustments, in cash (the "Asset Acquisition").

THE FINANCING

Under the Subscription Receipt Offering, Renegade, through a syndicate of underwriters co-led by GMP Securities L.P. and Genuity Capital Markets and including Dundee Securities Corporation, Macquarie Capital Markets Canada Ltd., Paradigm Capital Inc., FirstEnergy Capital Corp. and Peters & Co. Limited (collectively the "Underwriters") issued 11,430,000 subscription receipts ("Subscription Receipts") at a price of $3.50 per Subscription Receipt. The Underwriters received a cash fee equal to 5.5% of the gross proceeds raised under the Subscription Receipt Offering.

Each Subscription Receipt entitles the holder thereof to receive one common share in the capital of the Company (the "Common Shares"), without further payment or action on the part of the holder, upon the earlier of: (i) the day upon which a receipt (a "Receipt") is obtained for a final short form prospectus qualifying the Common Shares from the securities commissions or similar regulatory authorities in the jurisdictions in which subscribers of the Subscription Receipts reside; and (ii) August 30, 2010.

Pursuant to the underwriting agreement between the Company and the Underwriters, the Company has agreed to use its reasonable commercial efforts to file a short form prospectus qualifying the Common Shares and obtain a Receipt therefor by May 20, 2010. If the Company has not obtained a Receipt by such date, the Company will continue to use its reasonable commercial efforts to obtain such Receipt. Until a Receipt is issued for such prospectus, the Subscription Receipts will be subject to a four month hold period under applicable Canadian securities laws, expiring on August 30, 2010.

The gross proceeds of the Subscription Receipt Offering (the "Escrowed Funds") were deposited with Olympia Trust Company as escrow agent pending the completion by Renegade of the Asset Acquisition.

ASSET ACQUISITION

Upon closing of the Asset Acquisition, the Escrowed Funds were released from escrow and a portion of such funds was used to fund the Asset Acquisition purchase price of approximately $33 million in cash, net of adjustments. The Asset Acquisition is effective April 1, 2010.

The Asset Acquisition enhances two core areas for Renegade: the Hastings/Alameda area and the Rocanville area, in addition to adding to its core holdings in the Steelman area. The Asset Acquisition provides Renegade with long life high netback conventional light oil production and four additional operated facilities and infrastructure. Renegade believes the Assets have been under-exploited by horizontal drilling techniques and provide significant exploitation upside. Production from the Hastings/Alameda area comes primarily from the Midale and Frobisher formations. Production from the Rocanville area comes primarily from the Bakken formation.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. More particularly, this press release contains forward-looking statements related to the Asset Acquisition and its anticipated impact on Renegade; the accretive nature of the Asset Acquisition to the reserves of Renegade; and the ability of Renegade to develop and exploit the Assets.

The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade with respect to the Asset Acquisition including: (i) the ability to successfully apply horizontal drilling techniques to the Assets; (ii) the availability of adequate and secure sources of funding to develop and exploit the Assets; (iii) the availability of drilling rigs, the success of future drilling and development activities in relation to the Assets and prevailing commodity prices; (iv) the performance of Renegade's personnel, the availability of capital and prevailing commodity prices; and (v) the ability to drill and operate wells on an economic basis.

Although Renegade 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 Renegade can give no 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, 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, and health, safety and environmental risks), and commodity price, interest rate and exchange rate fluctuations. The forward-looking statements contained in this document are made as of the date hereof and Renegade undertakes no 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.

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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 press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Neither 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.

Contact Information

  • Renegade Petroleum Ltd.
    Michael Erickson
    President & CEO
    (403) 355-8922
    or
    Renegade Petroleum Ltd.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376