Nextraction Energy Corp.
TSX VENTURE : NE

Nextraction Energy Corp.

December 19, 2013 20:23 ET

Nextraction Closes Non-Brokered Private Placements and Loan Conversion

CALGARY, ALBERTA--(Marketwired - Dec. 19, 2013) -

THIS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMMINATION IN THE UNITED STATES AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN.

Nextraction Energy Corp. (TSX VENTURE:NE) (the "Company" or "Nextraction"). Further to Nextraction's press release dated October 2, 2013, the Company is pleased to announce that Nextraction has closed a private placement and loan conversion transaction, with an aggregate transaction value of $1,877,200.

Private Placements

Nextraction has closed a private placement of 1,253,166 units ("Units") at a price of $0.15 per Unit for gross proceeds of $187,975, and secured subordinated debentures ("Debentures") for gross proceeds of $627,000, raising aggregate gross proceeds of $814,975 (collectively, the "Private Placements").

Each Unit consists of one common share in the capital of the Company (a "Common Share") and one-half of one non-transferable Common Share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle its holder to purchase one additional Common Share (a "Warrant Share") at a price of $0.25 for a period of eighteen months from the date of issuance.

The Debentures carry an annual coupon rate of 10%, with interest paid quarterly. The definitive terms and conditions of the Debentures and rights of the debentureholders are set forth in the debenture indenture dated December 18, 2013 between the Company and Computershare Trust Company of Canada, which is available on SEDAR at www.sedar.com.

The Company paid cash finder's fees of $1,498.50 to Raymond James Ltd., representing 6% of the aggregate proceeds received from subscribers of Units introduced to the Company by Raymond James Ltd.

The net proceeds of the Private Placements are expected to be used to continue development of the Company's Provost Viking light oil project in eastern Alberta. The Company is operating the drilling and completion of a horizontal well on its 50% working interest lands. The Company is planning to commence drilling operations in January 2014 and the horizontal well will target the Viking formation at a depth of 800 meters, and will include a 600 meter horizontal leg. The well follows the Company's previous drilling success on the Provost project and will be in close proximity to the Company's recently constructed multi-well oil battery.

It is planned that the well will be placed onto continuous production in February 2014 and pending the evaluation of testing results of the well the Company plans to follow up with a second horizontal well off the same pad site in early 2014.

Loan Conversion

In conjunction with the Private Placement, Nextraction has also completed the conversion of $1,062,225 of outstanding loans (the "Loan Conversion") owed to Frank Hallam, Paul Trost and Anthem Works Ltd., into $534,000 of Debentures and 3,521,500 Common Shares at a deemed price of $0.15 per Common Share. Frank Hallam and Paul Trost are directors of the Company, and Anthem Works Ltd. is a private company controlled by Eric Carlson, who is also a director and Chairman of the Company. Immediately following completion of the Loan Conversion, Nextraction will have a remaining outstanding balance of approximately $375,000 pursuant to the bridge loans provided by certain directors of the Company, or entities controlled by directors of the Company.

Related Party Transaction

Following completion of the Loan Conversion, Mr. Carlson will beneficially own or control, directly or indirectly, 14.4%, Mr. Hallam 2.1% and Mr. Trost 0.7%, of the outstanding securities of the Company. As such, the Loan Conversion is a "related party transaction" pursuant to Policy 5.9 of the TSXV and under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions; however, it is exempt from the requirements to obtain a formal valuation or minority approval as the fair market value of the Loan Conversion is less than 25% of the Company's market capitalization. The directors who participated in the Loan Conversion declared their interest and abstained from voting in respect of the approval of the Loan Conversion. Documentation with respect to the Loan Conversion was accepted for filing by the TSXV.

The Common Shares, Warrants, Warrant Shares and Debentures issued pursuant to the Private Placement and Loan Conversion are subject to a four-month hold period from the date of closing.

For further information, please visit the Company's website at www.nextraction.com.

READER ADVISORY

Cautionary Note Regarding Forward Looking Statements

Certain statements made and information contained herein may constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities legislation. Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "may have", "could", "would", "might" or "will" be taken, occur or be achieved.

Although management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward- looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

These statements speak only as of the date of this News Release and are expressly qualified, in their entirety, by this cautionary statement.

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.

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