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or Name
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CA



Artisan Energy Corp
Symbol AEC
Shares Issued 64,321,134
Close 2014-11-25 C$ 0.35
Market Cap C$ 22,512,397
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Artisan closes MOGL, Spur purchase, $900,000 tranche

2014-11-25 21:57 ET - News Release

Mr. Rick Ironside reports

ARTISAN ENERGY ANNOUNCES ACQUISITION OF MOGL CORP & SPUR ENERGY CORP, INITIAL CLOSING OF PRIVATE PLACEMENT AND ANNUAL GENERAL MEETING RESULTS

Artisan Energy Corp. has completed its previously announced acquisition of all of the issued and outstanding shares of each of MOGL Corp. and Spur Energy Corp., private oil and gas exploration and production companies with operations in Western Canada.

MOGL acquisition

Total consideration paid by Artisan for all of the issued and outstanding shares in the capital of MOGL consisted of 10.81 million units of Artisan at a deemed price of 25 cents per acquisition unit and 4.8 million common shares of Artisan at a deemed price of 25 cents per Artisan common share. Each acquisition unit consists of one Artisan common share and one common share purchase warrant of Artisan, each warrant entitling the holder thereof to purchase one Artisan common share at a price of 30 cents per Artisan common share for a period of one year from the closing date of the acquisition. The outstanding bridge loans owed by MOGL referred to in the company's Oct. 1, 2014, press release, being $1.2-million in the aggregate, were converted into common shares of MOGL immediately prior to the completion of the acquisition.

Pursuant to the acquisition, Artisan is assuming approximately $2.9-million of bank debt of MOGL with a recognized Canadian financial institution.

Spur acquisition

Total consideration paid by Artisan for all of the issued and outstanding shares in the capital of Spur consisted of 518,000 Artisan common shares at a deemed price of 25 cents per Artisan common share.

Assets acquired pursuant to the acquisition

The assets to be acquired pursuant to the acquisition are situated proximally to Artisan's Ferrybank oil production in central Alberta. The assets are principally low-decline natural gas wells currently producing in excess of 1.35 million cubic feet per day (225 barrels of oil equivalent per day). Based on the independent reserve evaluation of McDaniel & Associates Consultants Ltd., effective April 1, 2014, the assets have a proved reserve value (NPV10 before tax) of $6,206,300 and a proved plus probable reserve value (NPV10 before tax) of $8,755,500. Artisan has identified several future development locations within the assets.

The assets are cash flow assets for Artisan because: (i) they are located in an area that allows for operational synergies with its existing assets; and (ii) they provide low capital expenditure and stable cash flow, which better position Artisan to pursue financing, joint venture, and acquisition opportunities to develop and expand its core assets at Chip Lake and Tomahawk.

Non-brokered private placement

The corporation is also pleased to announce that it has completed the initial closing of its previously announced non-brokered private placement. Artisan issued 3.6 million units of Artisan at a price of 25 cents per financing unit, for aggregate gross proceeds of $900,000. Each financing unit consists of one Artisan common share and one common share purchase warrant, each warrant entitling the holder thereof to purchase one Artisan common share at a price of 30 cents per Artisan common share for a period of one year from the date of issuance thereof. Proceeds from the private placement will be used to reduce indebtedness and to advance Artisan's various development-stage projects. Artisan did not pay any commissions in relation to the private placement. Artisan expects to complete the final closing of the private placement for estimated additional gross proceeds of $1.1-million on Nov. 28, 2014. The securities issued pursuant to the private placement are subject to a four-month-plus-one-day hold period.

Annual general meeting results

Artisan held its annual general and special meeting of shareholders on Nov. 25, 2014, and all proposed resolutions were approved. As a result, Artisan is pleased to welcome Donald MacDonald and Daniel Anderson to its board of directors. The extensive business experience and industry relationships garnered by Mr. MacDonald and Mr. Anderson will be extremely valuable to Artisan's effort to develop the key Chip Lake and Tomahawk assets and to position itself for sustained growth. Mr. MacDonald and Mr. Anderson were formerly principals and directors of MOGL and Spur. Mr. MacDonald was also a controlling shareholder of MOGL and a significant shareholder of Spur. Mr. Anderson was also a significant shareholder of MOGL and Spur.

Mr. MacDonald is the founder and chairman of Sanjel Corp., a private, family-owned, oil field service company. Sanjel is one of the largest oil field service companies headquartered in Canada and currently employs over 4,000 people throughout Canada and its international operations. Mr. Macdonald is also a founding shareholder and director of MacBain Properties Ltd., a private real estate company headquartered in Calgary. Mr. MacDonald is a founding shareholder and past director of WestJet Airlines, having served on its board of directors for five years. Mr. MacDonald is currently a shareholder and director of Predator Drilling Inc. and Certarus Ltd., private oil field service companies. Mr. MacDonald is a professional engineer and a current member of the Association of Professional Engineers and Geoscientists of Alberta.

Mr. Anderson has been an independent businessman for 26 years. Mr. Anderson is a principal and shareholder of KC Wellsite Management Ltd., an oil and gas well site company, Lad Inc., an aviation leasing, acquisition and data company, Kelly Down Ltd., a private investment and lending company, and Iron Giant Rentals, an oil and gas equipment rental company. Mr. Anderson is also a director and shareholder of Shelter Modular Inc., a manufacturer, seller and renter of modular building units.

The board and management of Artisan would like to thank outgoing directors Ron Wanner and Tim Dunne for their time and dedication to Artisan, and they wish them well in their future business.

Share consolidation

At the AGM, a resolution was approved authorizing Artisan's board of directors to implement, at its discretion and subject to further regulatory approval, a share consolidation on the basis of one postconsolidation share for every four preconsolidation shares, or such lesser number of preconsolidation shares as may be determined by the board of directors or accepted by the TSX Venture Exchange.

Artisan has approval to implement the share consolidation for up to one year, and the board of directors will continue to review the merits of the share consolidation in the coming months in light of market conditions and financing and acquisition opportunities. In the event that Artisan finances its growth strictly by equity, debt or cash flow as compared with joint venture or farm-out opportunities, which are currently being pursued, then Artisan believes that the proposed share consolidation will better position the corporation to access the capital it requires. The securities issued in connection with the acquisition and the private placement were issued on a preconsolidation basis.

We seek Safe Harbor.

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