Nextraction Energy Corp.
TSX VENTURE : NE

Nextraction Energy Corp.

October 02, 2013 12:31 ET

Nextraction Energy Corp. Announces Non-Brokered Private Placement, Shares for Debt Transaction and Termination of Proposed Prospectus Offering

CALGARY, ALBERTA--(Marketwired - Oct. 2, 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"), announces that it intends to issue, through a non‐brokered private placement, up to 16,666,667 units ("Units") at a price of $0.15 per Unit for gross proceeds of up to $2,500,000, along with secured subordinated debentures ("Debentures") for gross proceeds of up to $2,500,000 (the "Private Placement"). Collectively, completion of the Private Placement will provide the Company with gross proceeds of up to $5,000,000.

Each Unit will consist 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 following the closing date of the Private Placement. The Debentures will carry an annual coupon rate of 10%, with interest paid quarterly, and will be sold in increments of $1,000. The Company may pay finder's fees on a portion of the Private Placement of up to 6% of the aggregate proceeds received from parties introduced to the Company by a finder.

The closing of the Private Placement is expected to be on or about October 28, 2013, subject to the receipt of all necessary regulatory approvals, including from the TSX Venture Exchange ("TSXV") and the receipt of certain consents and waivers from Tallinn Capital Corp. ("Tallinn"). Net proceeds from the Private Placement will be used for further development of the Company's Provost Viking light oil project, repayment of some or all of the outstanding amount owing pursuant to the Company's mezzanine debt with Tallinn and general corporate purposes.

In conjunction with the Private Placement, Anthem Capital, a private company controlled by Eric Carlson, a Director and Chairman of the Company, along with Frank Hallam and Paul Trost, both Directors of the Company, have agreed to convert $1,060,000 of outstanding loans owed to them by the Company into $532,500 of Debentures and $527,500 of Common Shares (the "Loan Conversion"). Following completion of the Loan Conversion, it is expected that Mr. Carlson will control, directly or indirectly, an aggregate of 10.7%, Mr. Hallam will own 1.9% and Mr. Trost will own 0.9% of the outstanding securities of the Company, on a fully‐diluted basis. It is anticipated that the Company will have approximately $375,000 remaining outstanding pursuant to the bridge loans provided by certain directors of the Company.

The Loan Conversion will be a "related party transaction" pursuant to Policy 5.9 of the TSXV; 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 participating in the Loan Conversion declared their interest and abstained from voting in respect of the approval of the Loan Conversion. The Loan Conversion remains subject to the approval of the TSXV.

The Common Shares, Warrants, Warrant Shares and Debentures issued or issuable under the Private Placement will be subject to a four month hold period.

The Company also announces that it has mutually agreed to discontinue its engagement of Macquarie Private Wealth in respect of the proposed short form prospectus offering previously announced by the Company on May 15, 2013, and as such the Company will not be proceeding with the previously announced short form prospectus offering.

Additionally, the Company announces that it has relocated its head office to its Calgary offices effective October 1, 2013.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

About Nextraction Energy Corp.

Nextraction Energy Corp. is a Canadian junior oil and natural gas company engaged in the exploration and development of oil and natural gas resources in the Western Canadian Basin. The Company's model is the "next round of extraction on known plays." Nextraction targets oil focused projects along trends with known reserves that provide low risk, high return development opportunities in both conventional and unconventional resource projects.

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 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.

These statements include, but are not limited to, those made above with respect to future events or the Company's future performance, completion of definitive documents, the anticipated timing for completion of the Private Placement, and the receipt of necessary approvals.

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. Such assumptions, risks, uncertainties and factors include, but are not limited to:

  1. closing of the Private Placement could be delayed if the Company cannot obtain all necessary approvals, including the approval of the TSXV, within anticipated timelines;
  2. closing of the Private Placement may not occur at all unless certain conditions for transactions of this kind are satisfied, including but not limited to the Company receiving all necessary consents and waivers from its existing lender;
  3. closing of the Loan Conversion may not occur at all if the Company cannot obtain approval of the TSXV with respect thereto; and
  4. variations in market conditions may affect the Company's ability to close the Private Placement on the terms described above, or at all.

Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, described or intended. Actual results may vary materially from the information provided in this release, and there is no representation by the Company that the actual results realized in the future will be the same in whole or in part as those presented herein. Accordingly, readers should not place undue reliance on forward- looking statements or forward-looking information. 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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