Oct 13 - New Zealand Energy Completes Financing for Acquisition of Assets from Origin Energy, Continues to Fill Orders in Private Placement

Source Press Release
Company New Zealand Energy Corp.L&M Energy LtdOrigin Energy Limited 
Tags Equity Financing, Financing, Asset Deals, Deals, Upstream Activities
Date October 01, 2013

New Zealand Energy Corp. (TSX VENTURE:NZ)(OTCQX:NZERF) ("NZEC" or the "Company") is pleased to announce that it has met the finance condition precedent required to acquire strategic upstream and midstream assets (the "Acquisition") from Origin Energy Resources NZ (TAWN) Limited, a wholly-owned subsidiary of Origin Energy Limited (ASX:ORG) (collectively "Origin"). The purchase price of approximately $33.7 million comprises a $6 million deposit from NZEC, $7.9 million from Subscription Receipts, $1.5 million directly from NZEC, and $18.25 million from L&M Energy Limited ("L&M").

The assets are being acquired jointly by NZEC and L&M, and include the Tariki, Waihapa and Ngaere Petroleum Mining Licenses totaling 23,049 acres in the main Taranaki Basin production fairway, as well as the Waihapa Production Station and associated gathering and sales infrastructure (collectively, "TWN Assets"). On closing, NZEC and L&M will form a 50/50 joint venture to explore, develop and operate the TWN Assets.

NZEC now awaits approval for the Acquisition from the New Zealand government, which is the final condition for completion of the Acquisition. Completing the Acquisition will transform NZEC into a fully integrated upstream/midstream company, positioning NZEC for increased production and cash flow with the infrastructure and drilling inventory to support long-term growth.

Non-brokered Private Placement

With financing of the Acquisition in place, the Company continues to fill orders for the private placement announced on September 19, 2013 (the "Offering") with the objective of raising up to an additional $7.1 million in general working capital. To date the Company has closed $7.9 million and issued 23.8 million subscription receipts (the "Subscription Receipts").

The balance of the Offering consists of up to 21.7 million Subscription Receipts at a price of $0.33 per Subscription Receipt. The Subscription Receipts are convertible into units (the "Units") consisting of one common share (a "Share") and one-half of one non-transferable share purchase warrant (each whole warrant referred to as a "Warrant") of the Company. Each Warrant will entitle the holder to acquire one Share at a price of $0.45 for a period of 12 months following closing of the Offering.

A director of NZEC subscribed for 3,030,303 Subscription Receipts in compliance with Multilateral Instrument 61-101 ("MI 61-101"). NZEC relied on exemptions from the formal valuation and minority approval requirements under MI 61-101 based on a determination that neither the fair market value of the Subscription Receipts being issued to the related party, nor the consideration being received for such Subscription Receipts, exceeds either $2.5 million or 25% of NZEC's market capitalization. NZEC was not able to give prior notice of the subscription as a result of the timing of the requirement to meet the financing condition precedent to the Acquisition. The Offering was approved by all directors of NZEC.

The funds will be held in escrow and released on closing of the Acquisition. If the Company is unable to close the Acquisition, the funds held in escrow will be returned to the subscribers, L&M and NZEC.

NZEC will file a short form prospectus with the applicable regulatory authorities in each of the provinces of Canada where Subscription Receipts are sold. Each Subscription Receipt will automatically convert into one Unit on the date that the Acquisition closes (the "Acquisition Closing Date") if a final receipt for the prospectus has been issued by the applicable regulatory authorities. If NZEC has not received a final receipt for its prospectus by the Acquisition Closing Date, then the Subscription Receipts will convert into Units when a prospectus receipt is issued or at the latest on the date that is four months and one day from the issuance of Subscription Receipts. The Shares and the Shares underlying the Warrants will be free-trading on conversion of the Subscription Receipts.

NZEC will pay a finder's fee to qualified persons comprising a 7% cash commission plus finder's warrants (the "Finder's Warrants") of the Company in an amount equal to 7% of the number of Subscription Receipts issued by the Company. Each Finder's Warrant will entitle the finder to acquire one Share at an exercise price of $0.33 for a period of 12 months following closing of the Offering.

The Offering is subject to TSX Venture Exchange acceptance.

The securities offered 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 applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd