Mar 7, 2011
NOT FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH
THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES
LAW.
CALGARY, March 7 /CNW/ – (TSX – PRQ) - Progress Energy Resources Corp. (“Progress” or the “Company”) today
announced that it has completed its previously announced public
offering (the “Financing”) of common shares (“Common Shares”) and 5.75%
Convertible Unsecured Subordinated Debentures (“Convertible
Debentures”) for aggregate gross proceeds of approximately $400
million.
Progress issued 14,400,000 Common Shares at a price of $13.90 per Common
Share and $200,000,000 principal amount of Convertible Debentures, on a
bought deal basis, for gross proceeds of approximately $400 million,
through a syndicate of underwriters led by BMO Capital Markets, Scotia
Capital Inc., CIBC World Markets Inc. and RBC Capital Markets and
including Cormark Securities Inc., Peters & Co. Limited, FirstEnergy
Capital Corp., National Bank Financial Inc., Canaccord Genuity Corp.
and Macquarie Capital Markets Canada Ltd. (the “Underwriters”).
Pursuant to its existing subscription right, Canada Pension Plan
Investment Board (“CPPIB”), which owned approximately 14.7 percent of
the Company’s outstanding Common Shares prior to the Financing,
purchased 2,116,800 of the Common Shares for gross proceeds of
$29,423,520.
The Convertible Debentures bear interest at a rate 5.75% per annum,
payable semi-annually on the last day of June and December, commencing
on June 30, 2011. The Convertible Debentures are convertible at the
holder’s option into Common Shares at a conversion price of $20.85 per
Common Share (the “Conversion Price”), and have a maturity date of June
30, 2016 (the “Maturity Date”). The Convertible Debentures are not
redeemable prior to July 1, 2014. On and after July 1, 2014 and prior
to the Maturity Date, the Convertible Debentures may be redeemed in
whole or in part from time to time at the Company’s option, at a price
equal to their principal amount plus accrued and unpaid interest up to
but not including the date of redemption, provided that the weighted
average trading price of the Common Shares on the TSX for the 20
consecutive trading days ending five days prior to the date on which
the notice of redemption is provided is at least 125% of the Conversion
Price.
The Convertible Debentures are direct, unsecured obligations of
Progress, subordinated to other indebtedness of the Company for
borrowed money and ranking equally with all other existing and future
unsecured subordinated indebtedness.
Subject to specified conditions including the approval of the Toronto
Stock Exchange (“TSX”), Progress will have the right to repay the
outstanding principal amount of the Convertible Debentures, on maturity
or redemption, through the issuance of Common Shares. Progress will
also have, subject to specified conditions including TSX approval, the
option to satisfy its obligation to pay interest through the issuance
and sale of Common Shares of the Company.
The net proceeds of the Financing will be used to expand the Company’s
2011 capital program to $350 million, reduce indebtedness and for
general corporate purposes.
The Debentures are listed and posted for trading on the Toronto Stock
Exchange under the symbol “PRQ.DB.C”.
This press release is not an offer of the securities for sale in the
United States. The securities have not been registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent registration or an exemption from
registration. This press release shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of
the securities in any State in which such offer, solicitation or sale
would be unlawful.
Not for dissemination in the United States.
Progress is a Calgary based, mid-size energy company primarily focused
on natural gas exploration, development and production in northwest
Alberta and northeast British Columbia. Common shares of Progress are
listed on the TSX under the symbol PRQ.
Advisory Regarding Forward-Looking Statements
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable securities
laws. The use of any of the words “expect”, “anticipate”, “continue”,
“estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”,
“believe”, “plans”, “intends” and similar expressions are intended to
identify forward-looking information or statements. More particularly
and without limitation, this press release contains forward-looking
statements and information concerning the use of the proceeds of the
Financing and the terms of the Convertible Debentures.
The forward-looking statements and information are based on certain key
expectations and assumptions made by Progress, including expectations
and assumptions concerning prevailing commodity prices and exchange
rates, applicable royalty rates and tax laws; future well production
rates; reserve and resource volumes; the performance of existing wells;
the success obtained in drilling new wells; the sufficiency of budgeted
capital expenditures in carrying out planned activities; and the
availability and cost of labour and service. Although Progress
believes that the expectations and assumptions on which such
forward-looking statements and information are based are reasonable,
undue reliance should not be placed on the forward looking statements
and information because Progress can give no assurance that they will
prove to be correct.
Since forward-looking statements and information address future events
and conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. These
include, but are not limited to, the risks associated with the oil and
gas industry in general such as operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
uncertainty of reserve and resource estimates; the uncertainty of
estimates and projections relating to reserves, resources, production,
costs and expenses; health, safety and environmental risks; commodity
price and exchange rate fluctuations; marketing and transportation;
loss of markets; environmental risks; competition; incorrect assessment
of the value of acquisitions; failure to realize the anticipated
benefits of acquisitions; ability to access sufficient capital from
internal and external sources; changes in legislation, including but
not limited to tax laws, royalties and environmental regulations; and
risk that the board of directors determines that it would be in the
best interests of Progress to deploy the proceeds from the Financing to
some other purpose.
Management has included the above summary of assumptions and risks
related to forward-looking information provided in this press release
in order to provide securityholders with a more complete perspective on
the Company’s future operations and such information may not be
appropriate for other purposes. The Company’s actual results,
performance or achievement could differ materially from those expressed
in, or implied by, the forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking information will transpire or occur, or if any of them
do so, what benefits that the Company will derive there from.
Accordingly, readers should not place undue reliance on the
forward-looking statements and information contained in this press
release.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on these and other factors that
could affect the operations or financial results of Progress are
included in reports on file with applicable securities regulatory
authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements and information contained in this
press release are made as of the date hereof and Progress undertakes no
obligation to update publicly or revise any forward-looking statements
or information, whether as a result of new information, future events
or otherwise, unless so required by applicable securities laws.
Oil and Gas Terms
The Company has adopted the standard of 6 mcf:1 boe when converting
natural gas to boes. Boe’s may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf:1 bbbl is based on an
energy equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the wellhead.