TORONTO, ONTARIO--(Marketwire - Feb. 27, 2013) - Dundee Energy Limited ("Dundee Energy" or the "Corporation") (TSX:DEN) announced today the terms of a rights offering to existing shareholders to raise gross proceeds of between approximately $8.0 and $9.2 million (the "Rights Offering"). The Corporation has received a notice of acceptance in respect of the Rights Offering from its principal regulator and expects to receive notices of acceptance from the remaining jurisdictions shortly.
Dundee Energy will be offering to eligible holders of its outstanding common shares (each, a "Common Share") of record as at the close of business on March 12, 2013 (the "Record Date") transferable rights (each, a "Right") to subscribe for common shares ("Rights Common Shares") or flow-through Common Shares ("FT Common Shares" and, together with the Rights Common Shares, the "Rights Shares") or a combination thereof, on the terms set forth in a rights offering circular (the "Rights Offering Circular") to be mailed by the Corporation to shareholders (and which will also be available on SEDAR).
Each registered holder of Common Shares on the Record Date will receive one Right for each Common Share held. A holder of Rights will be entitled to acquire one Rights Common Share or one Rights FT Share for every seven (7) Rights held upon payment of the applicable subscription price of: (a) $0.34, in the case of Rights Common Shares; and (b) $0.39, in the case of Rights FT Shares (the "Basic Subscription Privilege"). The Rights expire at 5:00 p.m. (Toronto time) on April 4, 2013, after which time unexercised Rights will be void and without value. Shareholders who exercise all their Rights under the Basic Subscription Privilege will also be entitled to acquire additional Rights Shares (to the extent additional Rights Shares are available, subject to certain limitations) pursuant to an additional subscription privilege to be provided for under the Rights Offering, the terms of which are described in the Rights Offering Circular (the "Additional Subscription Privilege").
Dundee Corporation, which owns approximately 57% of Dundee Energy, has committed to the board of directors of the Corporation to provide its aggregate subscription payments with respect to its subscriptions pursuant to the Basic Subscription Privilege and its maximum potential Additional Subscription Privilege (on the basis of subscriptions of Rights FT Shares) pursuant to the Rights Offering, amounting to approximately $9.2 million. This commitment has the same effect as a "stand-by commitment", as Dundee Corporation intends to acquire all of the Rights Shares not acquired under the Basic Subscription Privilege or the Additional Subscription Privilege by other shareholders. Dundee will not be paid a fee in consideration for exercising its rights under the Rights Offering.
The Rights will be listed on the Toronto Stock Exchange (the "TSX") under the symbol "DEN.RT" and are expected to commence trading on March 8, 2013. The TSX has also approved the listing of the Rights Common Shares and Rights FT Shares issuable upon exercise of the Rights.
The Rights and underlying Rights Shares are not being offered to, and may not be exercised by, persons who are residents of any jurisdiction other than each of the provinces and territories of Canada. Reference is made to the section in the Rights Offering Circular entitled "Ineligible Shareholders".
Dundee Energy expects the gross proceeds of this Rights Offering to be approximately $9.2 million, assuming full participation on the basis of Rights FT Shares. The Company intends to use the net proceeds of the Offering to fund an exploration program on the Corporation's southern Ontario assets and will renounce to subscribers of Rights FT Shares eligible Canadian exploration expenses ("CEE") in an amount equal to the subscription amount.
ABOUT THE CORPORATION
Dundee Energy Limited is a Canadian-based oil and natural gas company with a mandate to create long-term value for its shareholders through the exploration, development, production and marketing of oil and natural gas, and through other high impact energy projects. Dundee Energy holds interests, both directly and indirectly, in the largest accumulation of producing oil and gas assets in Ontario, in the development of an offshore underground natural gas storage facility in Spain and, through a preferred share investment, in certain exploration and evaluation programs for oil and natural gas offshore Tunisia. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "DEN".
Certain information set forth in this news release contains forward-looking statements. Forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including: exploration, development and production risks; uncertainty of reserve estimates; reliance on operators, management and key personnel; cyclical nature of the business; economic dependence on a small number of customers; additional funding that may be required to execute on exploration and development work; the ability to obtain, sustain or renew licenses and permits; risks inherent to operating and investing in foreign countries; availability of drilling equipment and access; industry competition; environmental concerns; climate change regulations; volatility of commodity prices; hedging activities; potential defects in title to properties; potential conflicts of interest; changes in taxation legislation; insurance, health, safety and litigation risk; labour costs and labour relations; geo-political risks; risks relating to management of growth; aboriginal claims; volatility of the Corporation's share price; royalty rates and incentives; regulatory risks relating to oil and natural gas exploration; marketability and price of oil and natural gas; failure to realize anticipated benefits of acquisitions and dispositions; information system risk; and other risk factors discussed or referred to in the section entitled "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2012 and the section entitled "Risk Factors" in the Rights Offering Circular.
Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive from them. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.