Mr. Grant Fagerheim of Whitecap reports
WHITECAP RESOURCES INC. AND MIDWAY ENERGY LTD. ANNNOUNCE COMPLETION OF ARRANGEMENT
Whitecap Resources Inc. and Midway Energy Ltd. have closed the previously announced plan of arrangement. Pursuant to the arrangement, Whitecap acquired all of the issued and outstanding Class A common shares of Midway for $111.35-million in cash and the issuance of an aggregate of 32.09 million common shares of Whitecap and also assumed Midway's debt. In connection with the arrangement, Whitecap entered into a supplemental warrant indenture whereby it assumed the obligations of Midway in respect of Midway's previously outstanding share purchase warrants that were issued by Midway in connection with a private placement completed in February, 2012. As a result, each previously outstanding warrant to acquire a Class A common share of Midway will now entitle the holder thereof to acquire 0.4802 of a common share at a price of $4 per 0.4802 of a common share ($8.33 per whole common share).
Whitecap is also pleased to announce the company's combined production is now 16,000 barrels of oil equivalent per day (68 per cent oil and natural gas liquids), and, as a result of the arrangement, the borrowing base of Whitecap's syndicated credit facility has been increased from $250-million to $400-million, an increase of 60 per cent.
Whitecap continues to be a high-netback light oil producer with a predictable and stable production base with low decline. The company's expanded opportunity base allows it to demonstrate per-share growth in cash flow, production, reserves and net asset value.
The arrangement was partially financed through a bought-deal public financing through a syndicate of underwriters co-led by GMP Securities LP and National Bank Financial Inc. and including Macquarie Capital Markets Canada Ltd., Dundee Securities Ltd., FirstEnergy Capital Corp., Cormark Securities Inc., Scotiabank and Desjardins Securities Inc. Pursuant to the offering, Whitecap issued 5,941,000 units at a price of $20.20 per unit for gross proceeds of approximately $120-million. Each unit was composed of one subscription receipt at a price of $10.10 per subscription receipt and one common share at a price of $10.10 per common share.
With the closing of the arrangement, trading in the subscription receipts is expected to be halted at the open of markets on April 23, 2012, and will remain halted until the close of business that day, at which time the subscription receipts are expected to be delisted. In accordance with their terms, subscription receipts were exchanged for common shares upon the closing of the arrangement, and the proceeds from the sale of the subscription receipts were released from escrow. Holders of subscription receipts are not required to take any action to receive the common shares to which they are entitled.
We seek Safe Harbor.