/NOT FOR DISTRIBUTION IN THE UNITED STATES OR DISSEMINATION OVER
UNITED STATES WIRE SERVICES/
CALGARY,
AB, Sept. 5, 2024 /CNW/ - Surge Energy Inc.
("Surge" or the "Company") (TSX: SGY) is pleased to announce the
closing (the "Closing") of its previously announced private
placement offering (the "Offering") of $175
million aggregate principal amount of senior unsecured notes
due 2029 (the "Notes"). The Notes bear interest at a rate of 8.500%
per annum and mature on September 5,
2029. The Notes were priced at 100% of par to yield 8.500%
per annum.
CLOSE OF OFFERING AND REPAYMENT OF SECOND LIEN CREDIT
FACILITY
Concurrent with the Closing of the Offering, Surge confirms that
it has repaid in full all amounts owing under the Company's
non-revolving second-lien term facility. The remainder of the
proceeds from the Offering will be used to repay other existing
indebtedness, including amounts drawn under the Company's revolving
first-lien credit facility, related transaction expenses, and for
general corporate purposes.
The Notes were offered for sale in each of the Provinces of
Canada to "accredited investors"
on a private placement basis in accordance with Canadian securities
laws, were not qualified for sale to the public under Canadian
securities laws and accordingly, any offer or sale of the Notes in
Canada will be made on a basis
which is exempt from the prospectus requirements of such securities
laws. In addition, the Notes have not been registered under the
U.S. Securities Act, or any state securities laws, and are being
offered and sold in the United
States only to qualified institutional buyers in reliance on
Rule 144A under the U.S. Securities Act and applicable state
securities laws and outside the United
States in offshore transactions in reliance on Regulation S
under the U.S. Securities Act.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, any security and shall not
constitute an offer, solicitation or sale in any jurisdiction in
which such an offer, solicitation, or sale would be unlawful.
The Offering was underwritten by National Bank Financial Markets
and BMO Capital Markets as joint bookrunners, in a syndicate that
includes ATB Capital Markets as joint lead manager.
INCREASE TO FIRST LIEN REVOLVING CREDIT FACILITY
Concurrent with the closing of the Offering, the Company has
also increased its revolving first lien revolving credit facility
by $40 million, from $210 million to $250
million. This increased facility is comprised of a committed
revolving term facility of $200
million and an operating loan facility of $50 million with a syndicate of lenders. The
first lien credit facility is a normal course, reserve-based credit
facility available on a revolving basis.
As at September 5, 2024, Surge's
newly-expanded $250 million first
lien revolving credit facility is completely undrawn, providing the
Company significant liquidity.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements. The use
of any of the words "anticipate", "continue", "estimate", "expect",
"may", "will", "project", "should", "believe", "potential" and
similar expressions are intended to identify forward-looking
statements. These statements involve known and unknown risks,
uncertainties and other factors that may cause actual results or
events to differ materially from those anticipated in such
forward-looking statements.
More particularly, this press release contains statements
concerning: the anticipated use of proceeds of the Offering; and
the offer or sale of the Notes. The forward-looking statements are
based on certain key expectations and assumptions made by Surge,
including expectations and assumptions around the performance of
existing wells and success obtained in drilling new wells;
current WTI pricing per barrel oil pricing; anticipated
expenses, cash flow and capital expenditures; the application of
regulatory and royalty regimes; prevailing commodity prices and
economic conditions; development and completion activities; the
performance of new wells; the successful implementation of
waterflood programs; the availability of and performance of
facilities and pipelines; the geological characteristics of Surge's
properties; the successful application of drilling, completion and
seismic technology; the determination of decommissioning
liabilities; prevailing weather conditions; exchange rates;
licensing requirements; the impact of completed facilities on
operating costs; the availability and costs of capital, labour and
services; and the creditworthiness of industry partners.
Although Surge believes that the expectations and assumptions on
which the forward-looking statements are based are reasonable,
undue reliance should not be placed on the forward-looking
statements because Surge can give no assurance that they will prove
to be correct. Since forward-looking statements 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, risks associated with
the condition of the global economy, including trade, public health
and other geopolitical risks; risks associated with the oil and gas
industry in general (e.g., 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 estimates; the uncertainty of estimates and
projections relating to production, costs and expenses, and health,
safety and environmental risks); commodity price and exchange rate
fluctuations and constraint in the availability of services,
adverse weather or break-up conditions; uncertainties resulting
from potential delays or changes in plans with respect to
exploration or development projects or capital expenditures; and
failure to obtain the continued support of the lenders under
Surge's credit facilities. Certain risks are set out in more detail
in Surge's AIF dated March 6, 2024
and in Surge's MD&A for the period ended December 31, 2023, both of which have been filed
on SEDAR+ and can be accessed at www.sedarplus.ca.
The forward-looking statements contained in this press release
are made as of the date hereof and Surge 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 required by applicable securities laws.
Neither the TSX nor its Regulation Services Provider (as that
term is defined in the policies of the TSX) accepts responsibility
of the accuracy of this release.
SOURCE Surge Energy Inc.
