Hyperion Exploration Corp.
TSX VENTURE : HYX

Hyperion Exploration Corp.

March 18, 2011 09:37 ET

Hyperion Announces Successful Completion of Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - March 18, 2011) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAWS

Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) is pleased to announce that it has successfully closed a previously announced bought deal financing with a syndicate of underwriters co-led by GMP Securities L.P. and Canaccord Genuity Corp., and including Desjardins Securities Inc., Wellington West Capital Markets Inc., Haywood Securities Inc., Integral Wealth Securities Inc., and Macquarie Capital Markets Canada Ltd. (collectively, the "Underwriters") of 22,000,000 subscription receipts ("Subscription Receipts") at a price of $1.50 per Subscription Receipt and 1,111,150 common shares ("Common Shares") issued on a "flow-through" basis ("Flow-Through Shares") at a price of $1.80 per Flow-Through Share for aggregate gross proceeds of approximately $35.0 million (the "Offering").

The net proceeds of the Subscription Receipt financing will be used to fund the purchase price payable by Hyperion for certain high working interest, operated assets in the Garrington area of west central Alberta for total consideration of approximately $22.0 million from a public oil and gas producer (the "Acquisition"). The balance of the net proceeds of the Subscription Receipt financing will be used for development of Hyperion's existing assets in Alberta and British Columbia, development of the assets to be acquired pursuant to the Acquisition, and general working capital purposes. Gross proceeds from the sale of the Flow-Through Shares will be used to fund ongoing exploration activities that will qualify as Canadian Exploration Expense, which will be renounced to the subscribers effective for the 2011 taxation year.

The gross proceeds of the Subscription Receipt financing are being held in escrow pending the completion of the Acquisition. If the Acquisition is completed on or before March 28, 2011, the proceeds will be released to Hyperion. If the Acquisition is not completed on or before March 28, 2011 or the definitive agreement in respect of the Acquisition is terminated at an earlier time or Hyperion announces publicly that it does not intend to proceed with the Acquisition, holders of Subscription Receipts will receive a cash payment equal to the offering price of the Subscription Receipts and any interest that was earned thereon during the term of the escrow.

On the deemed exercise of the Subscription Receipts, each Subscription Receipt will entitle the holder thereof to receive one Common Share. The Subscription Receipts will be deemed to be exercised on the earlier of: (a) July 19, 2011; and (b) that day on which a receipt is issued by the securities regulatory authorities in British Columbia, Alberta, Manitoba and Ontario for a final short form prospectus qualifying the Common Shares to be issued upon the exercise of the Subscription Receipts. Hyperion shall use reasonable commercial efforts from the date of closing of the private placement to obtain such receipt for the exercise of the Subscription Receipts within 30 days of closing of the Acquisition (the "Qualification Deadline"). If a receipt is not obtained on or before the Qualification Deadline, Hyperion shall issue to each holder of Subscription Receipts, for no additional consideration and without any further action on the part of the holder, an additional 0.1 of a Common Share for each Common Share to be issued to such holder upon the deemed exercise of the Subscription Receipts. Until the receipt is issued for such prospectus, the Subscription Receipts, as well as the Common Shares issuable upon the exercise thereof, will be subject to a four month hold period under applicable Canadian securities laws until July 19, 2011. The Flow-Through Shares are subject to a four month hold period under applicable Canadian securities laws until July 19, 2011.

FORWARD LOOKING AND CAUTIONARY STATEMENTS

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Hyperion shareholders and potential investors with information regarding the Company, including management's assessment of Hyperion's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Hyperion believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements. 

In particular, this press release may contain forward looking statements pertaining to the following:

  • the Offering;
  • the Acquisition;
  • the performance characteristics of the Company's oil and natural gas properties;
  • oil and natural gas production levels;
  • capital expenditure programs;
  • the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;
  • projections of commodity prices and costs;
  • supply and demand for oil and natural gas;
  • expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
  • treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.

The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

  • volatility in market prices for oil and natural gas;
  • liabilities inherent in oil and natural gas operations;
  • uncertainties associated with estimating oil and natural gas reserves;
  • competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
  • incorrect assessments of the value of acquisitions and exploration and development programs;
  • geological, technical, drilling and processing problems;
  • fluctuations in foreign exchange or interest rates and stock market volatility;
  • failure to realize the anticipated benefits of acquisitions;
  • general business and market conditions; and
  • changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Hyperion does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The Subscription Receipts, the Flow-Through Shares and the Common Shares underlying the Subscription Receipts have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and many not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable states securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Hyperion Exploration Corp.
    Trevor Spagrud
    President & Chief Executive Officer
    (403) 930-0701
    or
    Hyperion Exploration Corp.
    Doug Bailey
    Chief Financial Officer
    (403) 930-0703