Artisan Energy Corp. (TSXV: AEC.V) signed a letter of intent for the issued outstanding shares of MOGL Corp. and Spur Energy Corp., the company said Oct. 1.
The two private companies operate in western Canada. Artisan will pay MOGL about 10.8 million of its acquisition units. These units are comprised of one common share and one share purchase warrant, the company said. The warrants allow one share to be purchased for 30 cents for one year from the closing date, Artisan added.
Artisan will pay Spur 518,000 common shares, the company noted.
Artisan will assume about CA$2.9 million in MOGL’s bank debt with a recognized Canadian financial institution. Also, the $1.2 million in shareholder loans owned by MOGL will be converted to 4.8 million common shares of Artisan, the company said.
The definitive agreement is scheduled to be entered into on Oct. 14, and is scheduled to close on Nov. 14, Artisan added.
MOGL and Spur’s shareholder meetings, to approve the acquisition, are scheduled for Nov. 14, the company noted.
The assets pursuant to the acquisition are near the company’s Ferrybank production area in central Alberta, and produce more than 1.35 million cubic feet per day of natural gas. They have NPV-10 value of about $8.8 million, the company said.
Also, Artisan will complete a nonbrokered private placement of up to 8 million financing units with certain parties, including some MOGL shareholders. They will be priced at 25 cents each, for $2 million in proceeds, the company said. The units will consist of one common share and one share purchase warrant. The warrant will allow one share to be purchased at 30 cents for a period of one year from the date of issuance, Artisan added.
The private placement is scheduled to close Nov. 14, possibly in tranches, the company noted. Net proceeds will reduce debt and support development projects, Artisan said.
Artisan Energy Corp. is based in Calgary, Alberta.
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