Tourmaline Oil Corp. (TO: TOU) entered into a bought-deal financing of 3 million common shares at $41.75 per share and 850,000 flow-through common shares at $51.60 per share.
Tourmaline expects gross proceeds from the common share issuance of some $125.3 million and some $43.9 million from the flow-through share issuance for total gross proceeds of some $169.1 million.
Peters & Co. Ltd. leads the syndicate of underwriters Scotia Capital Inc., FirstEnergy Capital Corp., CIBC World Markets Inc., National Bank Financial Inc., TD Securities Inc., and RBC Capital Markets.
The underwriters will have an option to purchase up to an additional 15% of the common shares issued under this brokered offering at a price of $41.75 per share to cover over-allotments exercisable in whole or in part at any time until 30 days after the closing. In conjunction with the offering, certain officers, directors, employees of Tourmaline and their associates intend to participate by purchasing up to 45,000 common shares at $41.75 per share and up to 75,000 flow-through shares at $51.60 on a private placement basis.
The bought deal offering will be completed by way of short form prospectus in all of the provinces of Canada and on a private placement basis in the U.S. pursuant to exemptions from the registration requirements of the U.S. Securities Act. The offerings are subject to customary conditions including receipt of applicable regulatory approvals and are expected to close on or about Oct. 8.
Proceeds will be used to temporarily reduce indebtedness, which will then be available to be redrawn and applied to fund the expanded 2013 capital expenditure program from $847.5 million to $950 million and for general working capital purposes. Tourmaline will use the proceeds of the flow-through share financing to incur eligible Canadian Exploration Expenses on the exploration of its properties prior to Dec. 31 2014. These qualifying Canadian Exploration Expense expenditures will be renounced to subscribers for the 2013 tax year.
The securities offered have not been, and will not be, registered under the U.S. Securities Act.
Tourmaline Oil Corp. is an intermediate crude oil and natural gas E&P company focused in the Western Canadian Sedimentary Basin. The company is based in Calgary.