Argent Energy Trust announces a bought deal convertible debenture financing
/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
CALGARY, Oct. 10, 2013 /CNW/ - Argent Energy Trust ("Argent" or the "Trust") (TSX: AET.UN; AET:DB) is pleased to announce a bought deal convertible debenture offering for gross proceeds of C$60 million.
The Trust is pleased to announce that it has entered into an agreement with a syndicate of underwriters, co-led by Scotiabank, CIBC and RBC Capital Markets, pursuant to which it will issue C$60 million principal amount of 6.50% convertible unsecured subordinated debentures (the "Debentures") on a bought deal basis at a price of $1,000 per Debenture (the "Offering"). In addition, the Underwriters have been granted an over-allotment option, exercisable for a period of 30 days from closing of the Offering, to purchase up to an additional C$9.0 million principal amount of Debentures on the same terms. If the over-allotment option is fully exercised, gross proceeds from the Offering will be C$69 million.
Net proceeds from the Offering will be used to reduce outstanding indebtedness under the Trust's credit facility (the "Credit Facility") which indebtedness is expected to be incurred to purchase the previously announced acquisition of certain oil producing properties for approximately US$105 million (net of closing adjustments) in Wyoming (the "Acquisition"), which is expected to close on October 25, 2013. After the closing of the Acquisition and the subsequent closing of the Offering, the Trust will have approximately US$70 million drawn on its Credit Facility. The Trust aims to have maximum financial flexibility to avail itself of future opportunities and maintain its distribution.
The Debentures will bear interest at a rate of 6.50% per annum, payable semi-annually in arrears on June 30 and December 31 in each year commencing on December 31, 2013, and will mature on December 31, 2018 (the "Maturity Date"). The Debentures will be convertible at the holder's option into trust units of Argent (the "Units") at any time prior to the close of business on the earlier of: (i) the business day immediately preceding the Maturity Date or (ii) if called for redemption, on the business day immediately preceding the date fixed for redemption, or (iii) if called for repurchase pursuant to a change of control, on the business day immediately preceding the payment date, at a conversion price of $12.50 per Unit (the "Conversion Price"), subject to adjustment in certain circumstances. The Debentures will not be redeemable before December 31, 2016. On or after December 31, 2016 but prior to the Maturity Date, the Debentures will be redeemable at Argent's option at par plus accrued and unpaid interest, provided that the volume weighted average trading price of the Units on the Toronto Stock Exchange during the 20 consecutive trading days ending on the fifth trading day preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price.
The Offering is expected to close on October 31, 2013 and is subject to certain conditions, including approval of the Toronto Stock Exchange and Canadian provincial securities regulatory authorities.
About Argent Energy Trust
Argent is a mutual fund trust under the Income Tax Act (Canada). Argent's objective is to create stable, consistent returns for investors through the acquisition and development of oil and natural gas reserves and production with low risk exploitation potential, located primarily in the United States. Material information pertaining to Argent Energy Trust may be found on www.sedar.com or www.argentenergytrust.com.
The Units and the Trust's previously issued 6.00% convertible unsecured subordinated debentures are traded on the Toronto Stock Exchange under the symbols AET.UN and AET.DB, respectively.
Forward Looking Statements
This press release includes forward-looking information within the meaning of applicable Canadian and United States securities legislation. All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Argent budgets, forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information. In particular, forward-looking information contained in this press release includes, but is not limited to, information and statements concerning the Offering, the Acquisition, including the funding for the Acquisition, and the amount expected to be drawn on its Credit Facility upon completion of the Acquisition and Offering; the Debentures to be issued pursuant to the Offering; regulatory and other approvals required for the Offering; the use of proceeds from the Offering.
The forward-looking information provided in this press release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events. Argent cautions that its future oil, natural gas and natural gas liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing and amount of future capital expenditures, and other forward-looking information is subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of oil and gas.
These risks include, but are not limited to, oil and natural gas price volatility, Argent's access to cash flows and other sources of liquidity to fund its capital expenditures, its level of indebtedness, its ability to replace production, the impact of the current financial climate on Argent's anticipated business and financial condition, a lack of availability of or increases in costs of goods and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, economic conditions and other risks as described in documents and reports that Argent files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Argent's actual results and plans to differ materially from those contained in the forward-looking information.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid. All forward-looking information speaks only as of the date of this press release, and Argent assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Argent's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this press release.
SOURCE Argent Energy TrustFor further information:
Argent Energy Trust
Co-Chief Executive Officer & President
Argent Energy Trust
Chief Financial Officer
Argent Energy Trust