Petrocapita Income Trust

Petrocapita Income Trust

June 17, 2016 16:30 ET

Petrocapita Announces $20 Million Preferred Unit Offering

CALGARY, ALBERTA--(Marketwired - June 17, 2016) -


Petrocapita Income Trust (CSE:PCE.UN) ("Petrocapita" or the "Trust") announces that it has executed a distribution agreement ("Distribution Agreement") with Raintree Financial Solutions ("Raintree") to proceed, on a best efforts basis, with an offering of up to $20,000,000 of series 1 preferred trust units of the Trust ("Preferred Units") by way of an exempt market offering (the "Offering").

The Offering will proceed on the basis of a tied offering of Preferred Units of the Trust and Class A common shares (the "Shares") of Infracore Energy Corp. (the "Corporation"), a wholly owned subsidiary of the Trust which is to be formed as part of an internal reorganization of the Trust to hold both the limited partnership units of Petrocapita Oil and Gas L.P. and Infracore Processing LP, the material operating subsidiaries of the Trust.

Each Preferred Unit is priced at $1.00 and each Share is priced at $0.001. Each Share shall be exchangeable for 32 of the publically traded common units of the Trust (CSE:PCE.UN) at any time on or after 18 months from the date of issuance of the Shares, subject to certain restrictions, conditions and adjustments in certain circumstances.

The minimum subscription shall be 1,000 Preferred Units which will entitle the subscriber to subscribe for up to 250 Shares. Raintree will be paid a cash commission and administrative fee (equal in aggregate to 10% of the gross proceeds raised by Raintree) and will be entitled to subscribe for 20 Shares of the 250 shares subscribed for in the minimum subscription of the 1,000 Preferred Units sold through Raintree.

The Preferred Units will be non-voting, provide for annual distributions of $0.09 per Preferred Unit payable quarterly in arrears, be redeemable by the holder from and after the 4th year anniversary of their issuance date, and be retractable by the Trust.

The Shares shall be non-voting but will otherwise rank equally with other classes of common shares of the Corporation as to dividends and participation in the assets of the Corporation upon wind-up.

The Trust intends to use the net proceeds from the Offering to finance future growth opportunities (including acquisitions and investments), to finance capital expenditures and for general corporate purposes.

Petrocapita Oil and Gas L.P. is a limited partnership formed to hold oil and gas leases and production, and is focussed on development of its own properties and on accretive acquisitions in its area of focus, heavy oil in the Lloydminster area of east central Alberta and west central Saskatchewan.

Infracore Processing LP is a limited partnership being formed to hold all of the tangible oil and gas well site production treating, storage and transportation assets, well servicing rigs and equipment, fluid transportation equipment, produced water disposal facilities and oil treating and blending facilities of the Trust. It is also focussed on accretive acquisitions in the Trust's area of focus and on improving the Trust's oil and gas production netbacks through vertical integration.

The Offering will be made by way of private placement in Canada and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the Canadian Securities Exchange and other securities regulatory authorities as applicable.

The securities offered have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Petrocapita

Petrocapita Income Trust is a Specified Investment Flow Through trust developing and acquiring heavy oil production and infrastructure assets in the Lloydminster area of east central Alberta and west central Saskatchewan through its wholly owned subsidiary, Petrocapita Oil and Gas L.P.. It owns and operates 155 gross (147.3 net) oil wells, 9 produced water disposal facilities, a central oil processing facility, oil well service rigs, fluid haul trailers, motor graders and well site processing equipment. It is seeking accretive opportunities to acquire both oil production and complimentary midstream assets during a cyclical low in the oil markets.

Forward-Looking Information and Statements

This news release contains certain forward-looking information as defined under applicable securities legislation. All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Petrocapita forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information. In particular, forward-looking information contained in this news release includes, but is not limited to, information and statements concerning the Offering; the securities to be issued pursuant to the Offering; regulatory and other approvals required for the Offering; and the use of proceeds from the Offering.

The forward-looking information provided in this news release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events. Petrocapita cautions that assumptions have been made regarding, future crude oil prices; revenues; cash flows; liquidity; plans for future operations; expenses; the ability of Petrocapita to source and complete acquisitions; timing and amount of future capital expenditures, and other forward-looking information, which is subject to all of the risks and uncertainties normally incident to the development, production and sale of oil and gas.

These risks include, but are not limited to: inability to source and complete acquisitions; volatility in market prices and demand for crude oil; general economic, market and business conditions; the loss of key personnel; the failure to realize the benefits of acquisitions made; the inability to generate sufficient cash flow from operations to meet current and future obligations; the inability to obtain required debt and/or equity capital on acceptable terms or at all; adverse regulatory, royalty or tax changes; diversion of management to manage unforeseen business or operating issues; risks related to the exploration, development and production of oil and natural gas reserves; and other risks as described in documents and reports that Petrocapita files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Petrocapita's actual results and plans to differ materially from those contained in the forward-looking information.

Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward- looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid. All forward-looking information speaks only as of the date of this news release, and Petrocapita assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Petrocapita's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this news release.

Contact Information

  • Petrocapita GP I Ltd., as Administrator
    of Petrocapita Income Trust

    Mr. Alex Lemmens
    President and Chief Executive Officer

    Ms. Janet Stillwell
    Investor Relations
    (403) 966-2172