Lateral Capital Corp.

TSX VENTURE : LCP


Lateral Capital Corp.

February 13, 2013 19:33 ET

Lateral Capital Corp. Announces Fully Marketed Public Offering of Up to $115 Million of Equity

CALGARY, ALBERTA--(Marketwire - Feb. 13, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Lateral Capital Corp. ("Lateral" or the "Company") (TSX VENTURE:LCP) is pleased to announce that it has filed a preliminary long form prospectus with the securities authorities in all the provinces of Canada, except Quebec, in connection with a fully marketed public offering of subscription receipts ("Subscription Receipts") on a commercially reasonable efforts basis for minimum proceeds of $102 million and maximum proceeds of $115 million (the "Public Offering"). Stonecap Securities Inc. and Wolverton Securities Ltd. are acting as co-lead agents (collectively the "Agents"). The final terms of the Public Offering, including aggregate proceeds and pricing, will be determined in the context of the market.

The Company has granted the Agents an over-allotment option (the "Over-Allotment Option") to purchase up to an additional 15% of Subscription Receipts (or common shares if the Over-Allotment Option is exercised following the satisfaction of the Escrow Release Condition (as defined hereinafter)) at a price equal to the offering price to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option is exercisable, in whole or in part, at the discretion of the Agents, at any time up to 30 days following the closing of the Public Offering.

Upon closing of the Public Offering, the gross proceeds will be held in escrow in an interest bearing account (the "Escrowed Funds") by an escrow agent (the "Escrow Agent") mutually agreeable to the Company and the Agents. The Escrowed Funds and the interest earned thereon will be released to Lateral, and common shares will be issued to the holders of Subscription Receipts without payment of additional consideration or further action, upon delivery by the Company and the Agents, of an 'Escrow Release Notice' notifying the Escrow Agent that the terms of the Escrow Release Condition (as defined hereinafter) have been satisfied. The Escrow Release Condition will be deemed to have been satisfied upon all of the conditions to the completion of the acquisitions of the Whitecap Assets and the Redvers Assets (as defined hereinafter), as detailed in the Company's press releases dated November 28, 2012 and December 14, 2012respectively, being satisfied but for the payment of the purchase price for each respective asset, as applicable, to be satisfied by the release of the Escrowed Funds (the "Escrow Release Condition").

The net proceeds from the Public Offering and, as applicable, the Private Placement (as defined hereinafter), including any net proceeds received upon the exercise of the Over-Allotment Option, will be used by the Company: (i) to fund the purchase price of the Redvers Assets (as defined hereinafter) for total consideration of approximately $69.0 million; (ii) to fund the purchase price of the Whitecap Assets (as defined hereinafter) for total consideration of approximately $28.1 million; and, (iii) to fund the planned 2013 exploitation and development drilling program of up to $25.0 million.

Lateral announced in press releases dated November 28, 2012 and December 14, 2012 (as subsequently updated) that it had entered into agreements to acquire a combination of operated and non-operated light oil assets in SouthEast Saskatchewan (the "Whitecap Assets") and operated light oil assets in SouthEast Saskatchewan (the "Redvers Assets"). The Whitecap Assets and the Redvers Assets will provide the Corporation an enhanced asset base and a foundation for future growth.

The Whitecap Assets comprise 5,500 net acres (2,294 net undeveloped acres) in South East Saskatchewan and production as of September 30, 2012 of approximately 320 boe/d. A reserve report prepared by McDaniel & Associates Consultants Limited evaluated the Whitecap Assets reserves to be 1,126 Mboe of proved reserves and 1,539 Mboe of proved plus probable reserves as of September 30, 2012.

The Redvers Assets comprise 18,339 net acres (15,453 net undeveloped acres) in South East Saskatchewan and production as of September 30, 2012 of approximately 749 boe/d. A reserve report prepared by Sproule Associates Limited evaluated the Redvers Assets reserves to be 1,574 Mboe of proved reserves and 2,684 Mboe of proved plus probable reserves as of September 30, 2012.

As well, the Company is also considering debt financing alternatives including bank debt and/or other debt instruments ("Debt Instruments") in addition to the equity financing. In this regard, the Company has entered into an agreement with a US financial advisor to act as its advisor and placement agent in connection with a possible private placement of Debt Instruments of the Company, other than any Canadian bank debt, on a best efforts basis (the "Private Placement"). The final terms of the Private Placement, including aggregate proceeds, term, security on assets, pricing and structure of the Debt Instruments will be determined in the context of the market.

The Public Offering and the Private Placement are subject to the receipt of all applicable regulatory approvals, including approval of the TSX Venture Exchange.

Cautionary and Forward-Looking Statements

This news release contains forwardlooking statements and forwardlooking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forwardlooking statements or information. Forwardlooking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.

More particularly and without limitation, this news release contains forwardlooking statements and information concerning the Public Offering; the Private Placement; the acquisition of the Whitecap Assets and the Redvers Assets; the expected use of proceeds from the Public Offering and the Private Placement; the Corporation's petroleum and natural gas production and reserves with respect to the assets to be acquired; the Corporation's petroleum and natural gas production on an aggregate basis upon completion of the proposed acquisition of the Whitecap Assets and the Redvers Assets; anticipated closing dates of the asset acquisitions; the closing of the Public Offering and the Private Placement and the anticipated timing thereof. The forwardlooking statements and information are based on certain key expectations and assumptions made by management of the Corporation, including expectations and assumptions concerning well production rates and reserve volumes in respect of the assets to be acquired; expectations and assumptions concerning well production rates in respect of existing wells; project development; obtaining regulatory approval for the Public Offering and the Private Placement; and overall business strategy. Although management of the Corporation believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forwardlooking statements and information since no assurance can be given that they will prove to be correct.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Corporation relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forwardlooking statements and information 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 risks associated with the oil and gas industry in general such as 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 reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forwardlooking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.

The forwardlooking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forwardlooking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the TSX Venture Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

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

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

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.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

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

  • Lateral Capital Corp.
    Corbin Blume
    President, Chief Executive Officer, and Director
    (587) 350-7500
    (587) 350-7505 (FAX)
    cblume@lateralcapital.ca