Mr. Chayan Chakrabarty reports
BENGAL ENERGY ANNOUNCES CLOSING OF PRIVATE PLACEMENT AND DEBT SETTLEMENT
Bengal Energy Ltd. has closed its previously announced non-brokered private placement of common shares in the capital of the company to Texada Capital Management Ltd. Bengal is also pleased to announce the closing of the transactions contemplated by the debt settlement agreement with its senior secured lender Westpac Banking Corp. in respect of the settlement of all indebtedness and liabilities owing by Bengal's wholly owned subsidiary, Bengal Energy (Australia) Pty. Ltd., to Westpac under its secured credit facility.
Under the private placement, Bengal issued to Texada an aggregate of 330.72 million common shares at the price of five cents per share for aggregate gross proceeds of $16,536,000. Comprising the gross proceeds, Bengal received the amount of $12,536,000 (being the Canadian dollar equivalent of $10-million (U.S.) based on the daily average Canadian-/U.S.-dollar foreign exchange rate published by the Bank of Canada as at Feb. 24, 2021) on issuance of 250.72 million common shares and received the amount of $4-million on issuance of an additional 80 million common shares.
The amount of $10-million (U.S.) of the gross proceeds were applied by Bengal to the settlement of the principal amount owing by Bengal Pty. to Westpac under the debt settlement. The additional gross proceeds of approximately $4-million will be used by the company over the ensuing four months to satisfy current liabilities and to finance down-hole remedial work on two suspended gas wells located on its Wareena petroleum lease (PL 114) and associated natural gas pipeline maintenance in the Cooper basin of Queensland, Australia.
The private placement and debt settlement provide immediate financial stability for Bengal as it allows the company to address its working capital deficiency and to settle all amounts owing under the facility thereby becoming debt free with cash on hand and cash generating production operations that are enjoying recent strength in crude oil pricing.
In addition to the work at Wareena, the company has high-impact development and exploration programs planned over the course of the next 12 to 14 months to be financed from company cash flow, including:
- Production testing of the Ghina well natural gas discovery (PL157) and the oil discovery on the Ramses well (PL188);
- Ramp-up of the Cuisinier water injection facility to design capacity;
- Exploration drilling at the Cuisinier property in the first half of 2022.
In addition, exploration drilling by Santos Ltd. of the Legbar farm-in well on a portion of ATP 934 is scheduled for the second half of 2021. The company will have further operational updates as these programs progress and as additional programs are developed and scheduled.
Chayan Chakrabarty, the president and chief executive officer of Bengal, commented: "The successful closing of the debt settlement transaction and the private placement not only results in the company having no debt and the ability to deploy capital into our development and exploration programs over the near term, but it also allows us to continue working to build a viable, sustainable and growing company, for the benefit of all our stakeholders. On behalf of all of us at Bengal Energy, we thank Texada and its principal Bill Wheeler for their support."
About Bengal Energy Ltd.
Bengal Energy is an international junior oil and gas exploration and production company with assets in Australia.
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