Strategic Oil & Gas Ltd. (TSXV: SOG) entered into agreements to offer a total of some 48.3 million common shares to raise gross proceeds of some $48.2 million.
Strategic entered into a bought deal offering with a syndicate of underwriters for some 12.7 million common shares at $0.95 per share for gross proceeds of some $12 million and some 15.5 million flow-through common shares at $1.10 per share for gross proceeds of $17 million for total gross proceeds of some $29 million. The underwriters will have an option to purchase up to an additional 15% of the shares issued under the public offering to cover over-allotments exercisable in whole or in part at any time until 30 days after the closing.
Raymond James Ltd. and Macquarie Capital Markets Ltd. co-led the syndicate of underwriters Dundee Securities Corp., FirstEnergy Capital Corp., National Bank Financial Inc., Paradigm Capital Inc., and PI Financial Corp.
Some 20.2 million additional common shares will be issued to GMT Capital Corp. on a private placement basis at $0.95 per share for gross proceeds of some $19.2 million. Completion of the public offering is conditional on the completion of the private placement.
Net proceeds will be used to pay down bank indebtedness, fund its increase in the 2013 drilling program, fund the 2014 capital program, and for general corporate purposes. Flow-through share proceeds will be used to incur eligible Canadian exploration expenditures that will be renounced to subscribers effective on or before Dec. 31. The 2014 capital program is expected to be announced in December.
The public offering and private placement provide capital to increase the 2013 drilling program, which now includes the drilling of three Muskeg Stack wells, and capital to increase 1Q 2014 drilling program to include up to eight Muskeg Stack wells to further establish the significant potential of the Muskeg Stack resource.
Strategic Oil & Gas Ltd. is an independent energy company engaged in the exploration and development of petroleum and natural gas reserves in Western Canada. The company is headquartered in Calgary.