Edge Resources Inc.
TSX VENTURE : EDE

Edge Resources Inc.

March 05, 2012 08:45 ET

Edge Resources Inc. Announces Strategic Partnership and Retirement of Debt

CALGARY, ALBERTA--(Marketwire - March 5, 2012) - Edge Resources Inc. (TSX VENTURE:EDE) ("Edge" or the "Company") is pleased to announce a strategic capital investment by one of the UK's largest global asset management firms via a common share, bought-deal financing in the aggregate amount of $4,500,000 at $0.15 per share (the "Offering"). Simultaneously, the Company will retire $500,000 of recently issued debt, as the shareholder that previously provided the debt has decided to convert it to equity.

The Offering has been subscribed by Henderson Global Investments Limited ("Henderson") in a two-tranche bought deal, arranged by Merchant Securities Limited ("Merchant") of London. The scope of the investment will ultimately result in Henderson becoming a shareholder with greater than 20% of the issued and outstanding shares and thus will require shareholder approval prior to closing, pursuant to the policies of the TSX Venture Exchange. The Company expects to garner shareholder approval of the strategic placement via a consent resolution over the next few weeks, or, if necessary, management will hold a special shareholder meeting in Q2 2012.

Rob Giles, Director of Henderson, commented, "We believe Edge represents a compelling opportunity to develop a substantial business focused on the production of oil and gas. We have been impressed with the quality of the assets and the proficiency of management, and look forward to working with the company well into the future."

Merchant will receive a commission equal to $112,500 in cash (2.5% of the gross proceeds) and 750,000 common shares (2.5% of the aggregate common shares issued). Merchant will not receive any broker warrants in conjunction with this financing. Merchant will continue to assist the Company with its plans to co-list on the Alternative Investment Market (AIM) in London in 2012 and will act as the Company's nominated advisor and broker in the UK.

The net proceeds of the Offering will be used exclusively to develop the Company's oil assets with the objective of significantly increasing production and reserves from the Company's recently acquired assets in Primate, Saskatchewan and from the Company's existing oil-producing property in Grand Forks, Alberta.

The first tranche of the Offering ($1,250,000) is expected to close prior to March 9, 2012 subject to regulatory and Exchange approval. The second tranche of the Offering ($3,250,000) will close concurrently upon receipt of TSX Venture Exchange and shareholder approval. The shares issued under the Offering will have a four month and one day hold period from the date of issuance.

Brad Nichol, President & CEO of Edge, commented, "The opportunity to commence a long-term capital collaboration with a prominent partner like Henderson represents an exceptional strategic accomplishment to the benefit of all shareholders. We have cultivated a relationship with Henderson over many months and the quality of the recent oil-focused acquisition ultimately provided the catalyst to initiate this partnership. The capital they are providing now, at the agreed terms, represents an unparalleled opportunity for both parties and our existing shareholders in the current environment." Nichol added, "This capital injection will allow Edge to take the first significant steps of a major oil-focused initiative with expectations for significant increases in oil production and associated cash flow within the year."

The Company is also pleased to announce the retirement of $500,000 of secured debt, which will be converted into common shares at an issue price of $0.15 per share. The debt was previously provided by a shareholder of the Company and related to the recent asset acquisition, announced on February 1, 2012. There were no penalties, fees or warrants issued in association with the issuance of the debt, retirement of the debt, or conversion of the debt to equity. The issuance of the shares is subject to Exchange approval.

About Edge Resources Inc.

Edge Resources is focused on developing a balanced portfolio of oil and natural gas assets from properties in Alberta and Saskatchewan, Canada. The management team's high drilling success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.

About Henderson Global Investments Limited

Henderson Global Investors is a leading independent global asset management firm. The company provides its institutional, retail, and high net-worth clients access to skilled investment professionals representing a broad range of asset classes, including equities, fixed income, property and private equity. With its principal place of business in London, Henderson is one of Europe's largest investment managers, with approximately £64.3 billion (CDN$101.3 billion) assets under management.

For more information, visit the company website: www.edgeres.com.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. 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 of the U.S. Securities Act and applicable state securities laws.

Trading in the securities of Edge Resources Inc. should be considered highly speculative.

Neither the 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

  • Edge Resources Inc.
    Brad Nichol
    President
    +1 (403) 767 9905

    Edge Resources Inc.
    Nathan Steinke
    Chief Financial Officer
    +1 (403) 767 9905
    www.edgeres.com

    Merchant Securities Limited
    Max Bascombe
    +44 207 628 2200

    Merchant Securities Limited
    Lindsay Mair
    +44 207 628 2200