Shoreline Energy Corp.
TSX : SEQ

Shoreline Energy Corp.

February 13, 2012 08:00 ET

Shoreline Energy Corporation Announces Filing of Preliminary Prospectus for up to $12 Million Equity Offering and Acceleration of Light Oil Development Projects After Recent Successful Operations

CALGARY, ALBERTA--(Marketwire - Feb. 13, 2012) -

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

Shoreline Energy Corporation ("Shoreline" or the "Corporation") (TSX:SEQ) is pleased to announce that it has filed a preliminary short form prospectus in connection with a public offering of common shares of the Corporation (the "Common Shares") for gross proceeds of up to $12.0 million (the "Offering"). The Offering is led by Macquarie Capital Markets Canada Ltd., and includes a syndicate of agents consisting of MGI Securities Inc., Dundee Securities Ltd., GMP Securities, HSBC Securities (Canada) Inc., Jennings Capital Inc., and PI Financial Corp. (collectively, the "Agents") to issue and sell on a reasonable commercial efforts basis, Common Shares at an issue price to be determined within the context of the market.

Shoreline has also granted the Agents an over-allotment option to place, on the same terms, up to an additional 15% of the total number of Common Shares sold in connection with the Offering, for additional gross proceeds of up to $1.8 million. This option is exercisable, in whole or in part, by the Agents at any time up to 30 days after closing of the Offering. The maximum gross proceeds that may be raised under the Offering will be $13.8 million should this option be exercised in full.

The Corporation has agreed with the Agents that the net proceeds of the Offering, including any proceeds received upon the exercise of the over-allotment option granted to the Agents, will initially be used by the Corporation to reduce outstanding indebtedness, thereby freeing up borrowing capacity which will be redrawn and applied to fund the Corporations capital expenditure program, and for general corporate purposes.

The Common Shares will be offered in all provinces of Canada (other than Quebec) by way of a short form prospectus and the Common Shares may be sold in the United States on a private placement basis pursuant to exemptions from registration requirements. Closing of the Offering is expected to occur on or about February 28, 2012 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.

Operational & Corporate Update

Shoreline is pleased to announce continued success from its capital program in the Peace River Arch area, increasing the Company's oil production weighting. In addition, the Company also announces that it has hedged a portion of its 2012 oil production at above current market prices.

  • In the Bonanza area of the Peace River Arch, the Company has concluded successful completion and testing operations at the Company's horizontal well (100% WI) drilled in January. During testing the well produced an estimated 125 BOE per day (62% oil). The well is anticipated to commence production in February 2012.
  • In the Progress area, the Company has completed drilling operations on its first horizontal well targeting light oil in the Charlie Lake formation. The well remained in the target zone for over 95% of the horizontal length, and encountered over 500 meters of oil pay. Completion operations are scheduled to commence immediately, the Company intends on operating continuously in the area until spring break-up.
  • The company has a total of 480 boed (41% oil) net-risked initial production currently tested and awaiting tie in. The recently drilled Progress Horizontal well is not included in this estimate. These volumes are expected to be on over the next 6 weeks.

Investor Information

Currently, Shoreline has 5,719,317 common shares, 5,090,782 common share purchase warrants and 383,045 options outstanding.

Shoreline is a Calgary, Alberta-based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the TSX under the trading symbol "SEQ". Additional information regarding Shoreline is available under the Corporation's profile at www.sedar.com or at the Corporation's website, www.shorelineenergy.ca.

Forward-Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities, including the successful marketing and closing of the Offering. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations.

Forward-looking statements typically use words such as "will", "anticipate", "believe", "estimate", "expect", "intend", "may", "project", "should", "plan", and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may", "would", "could", or "will" be taken or occur in the future. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. All dollar figures shown are unaudited and are estimates only.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Shoreline believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Shoreline does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 MCF:1 BOE is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Contact Information

  • Shoreline Energy Corporation
    Mr. Trevor Folk
    Chief Executive Officer
    tfolk@shorelineenergy.ca

    Shoreline Energy Corporation
    Mr. Kevin Stromquist
    President & Chief Operating Officer
    ktsromquist@shorelineenergy.ca

    Shoreline Energy Corporation
    Mr. Daniel (Dan) Grisdale
    Chief Financial Officer
    dgrisdale@shorelineenergy.ca

    Shoreline Energy Corporation
    Calgary Office
    Suite 400, 209-8th Ave SW
    Calgary, Alberta, T2P 1B8
    (403)767.9066

    Shoreline Energy Corporation
    Toronto Office
    Suite 103, 145 King Street West
    Toronto, Ontario, M5H 1J8
    www.shorelineenergy.ca