REG - Southern Energy Corp - COMPLETION OF FUNDRAISING AND PREMIUM TO NYMEX
07/07/2022 14:45
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RNS Number : 7279R Southern Energy Corp. 07 July 2022
Defined terms used in this announcement have the same meaning as given to them
in the Company's announcement released on June 23, 2022, unless otherwise
defined herein.
SOUTHERN ENERGY CORP. ANNOUNCES COMPLETION OF FUNDRAISING AND PREMIUM TO NYMEX
PRICING CONTRACT
Calgary, Alberta - July 7, 2022 - Southern Energy Corp. ("Southern" or the
"Company") (SOU: TSXV; AIM: SOUC), a U.S.-focused, growth-oriented natural gas
producer, is pleased to announce the closing of its previously announced
Offering to raise, in aggregate, gross proceeds of US$31.0 million through the
issue of 46,371,927 new Common Shares. The Underwriters will not be
exercising the over-allotment option granted to them in connection with the
Offering.
The net proceeds from the Offering will be used to accelerate the initiation
of a continuous organic drilling programme at the Company's Gwinville field,
as well as increase the Company's financial flexibility for potential
acquisition opportunities.
Ian Atkinson, President and CEO of Southern, commented:
"With our strengthened financial capability, we now look ahead to further
exciting operational activity at Gwinville while also being capable of
considering M&A opportunities in our core area of expertise from a
position of strength. With a multi-year drilling inventory in Gwinville alone,
we look forward to realising our forward growth potential of our goal to reach
25,000 boe/d; with more drilling anticipated to begin later this year."
"I would like to thank all of our new and existing shareholders for their
support throughout this process as well as for their continued engagement in
our Company."
Financial Update
On June 27, 2022, the Company entered into basis swaps covering just under 40%
of our physical price exposure with a natural gas basis swap transaction to
secure an average premium to NYMEX of $0.39 per MMBtu from July 1, 2022 to
December 31, 2022. This opportunity exists due to increased natural gas demand
in the southeast Gulf States where traditionally the pricing would range
between NYMEX plus or minus $0.05 per MMBtu. Strong demand in our core area is
further highlighted by spot basis where our natural gas is currently selling
for a $3.40 per MMBtu premium to NYMEX. The Company continues to monitor these
premium prices and is prepared to hedge additional basis exposure at these
elevated basis premiums.
Calvin Yau, Chief Financial Officer of Southern, commented:
"We are now selling natural gas at a premium to NYMEX pricing which I believe
is indicative of the current supply and demand dynamics we are facing in the
United States, and our ability to lock in long term hedges at these elevated
basis premiums is indicative that this supply demand imbalance is forecasted
to remain for an extended period of time."
Admission and Total Voting Rights
Further to the Company's announcement on May 6, 2022 regarding the application
to AIM for a block admission in respect of certain outstanding dilutive
instruments in the Company (the "Block Admission"), the Company notes that
3,101,875 new Common Shares were issued in June 2022 pursuant to the exercise
of such instruments. Accordingly, as at June 30, 2022, Southern Energy had
89,536,858 Common Shares in issue.
Following the issue of the Offering Shares, Southern has 135,908,785 Common
Shares in issue. There are no Common Shares held in treasury and each Common
Share entitles the holder to a single vote at general meetings of the Company.
This figure may therefore be used by shareholders in the Company as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change in their interest in, the
share capital of the Company.
The Placing Shares were issued and admitted to trading on AIM on July 5, 2022
and the Prospectus Offering Shares are expected to be admitted to trading on
AIM at 8:00 a.m. (UK) on or around July 8, 2022.
PDMR Dealings
It is noted that certain Directors and other PDMRs of the Company have
participated in the Prospectus Offering, on the same terms as all other
participants, to subscribe for, in aggregate, 448,274 Prospectus Shares.
Further details regarding individual participation of the Company's Directors
and other PDMRs are set out in the PDMR notification forms below.
About Southern Energy Corp.
Southern Energy Corp. is a natural gas exploration and production company.
Southern has a primary focus on acquiring and developing conventional natural
gas and light oil resources in the southeast Gulf States of Mississippi,
Louisiana, and East Texas. Our management team has a long and successful
history working together and have created significant shareholder value
through accretive acquisitions, optimization of existing oil and natural gas
fields and the utilization of re-development strategies utilizing horizontal
drilling and multi-staged fracture completion techniques.
For further information, please contact:
Southern Energy Corp.
Ian Atkinson (President and
CEO)
+1 587 287 5401
Calvin Yau (VP Finance and
CFO)
+1 587 287 5402
Strand Hanson Limited - Nominated & Financial Adviser +44 (0) 20
7409 3494
James Spinney / James Bellman / Rob Patrick
Canaccord Genuity - Joint
Broker
+44 (0) 20 7523 8000
Henry Fitzgerald-O'Connor / James Asensio
Hannam & Partners - Joint
Broker
+44 (0) 20 7907 8500
Samuel Merlin / Ernest Bell
Camarco
+44 (0) 20 3757 4980
James Crothers / Billy Clegg / Hugo Liddy
Forward Looking Statements
Certain information included in this Announcement constitutes forward-looking
information under applicable securities legislation. Forward-looking
information typically contains statements with words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "propose", "project" or
similar words suggesting future outcomes or statements regarding an outlook.
Forward-looking information in this Announcement may include, but is not
limited to, statements concerning the use of proceeds of the Offering, the
Company's business strategy, objectives, strength and focus and the Company's
capital program.
The forward-looking statements contained in this Announcement are based on
certain key expectations and assumptions made by Southern, including the
timing of and success of future drilling, development and completion
activities, the performance of existing wells, the performance of new wells,
the availability and performance of facilities and pipelines, the geological
characteristics of Southern's properties, the characteristics of its assets,
the successful application of drilling, completion and seismic technology,
benefits of current commodity pricing hedging arrangements, prevailing weather
conditions, prevailing legislation affecting the oil and gas industry,
commodity prices, royalty regimes and exchange rates, the application of
regulatory and licensing requirements, the availability of capital, labour and
services, the creditworthiness of industry partners and the ability to source
and complete asset acquisitions.
Although Southern 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 Southern 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, the risk that the Company may apply the
proceeds of the Offering differently than as stated herein depending on future
circumstances; risks associated with the oil and gas industry in general
(e.g., operational risks in development, exploration and production; the
uncertainty of reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety and
environmental risks), constraint in the availability of services, negative
effects of the current COVID-19 pandemic, commodity price and exchange rate
fluctuations, geo-political risks, political and economic instability abroad,
wars (including Russia's military actions in Ukraine), hostilities, civil
insurrections, inflationary risks including potential increases to operating
and capital costs, changes in legislation impacting the oil and gas industry,
adverse weather or break-up conditions and uncertainties resulting from
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures. These and other risks are set
out in more detail in the Final Prospectus and Southern's most recent
management's discussion and analysis and annual information form, which are
available under the Company's SEDAR profile at www.sedar.com.
The forward-looking information contained in this Announcement is made as of
the date hereof and Southern undertakes no obligation to update publicly or
revise any forward-looking information, whether as a result of new
information, future events or otherwise, unless required by applicable
securities laws. The forward-looking information contained in this
Announcement is expressly qualified by this cautionary statement.
http://www.southernenergycorp.com (http://www.southernenergycorp.com)
Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
PDMR NOTIFICATION FORMS
1 Details of the person discharging managerial responsibilities / person closely
associated
a) Name 1. Ian Atkinson
2. Calvin Yau
3. Gary McMurren
4. Bruce Beynon
5. Andrew McCreath
2 Reason for the notification
a) Position/status 1. President and Chief Executive Officer (Director)
2. VP Finance and CFO
3. VP Engineering
4. Non-Executive Director
5. Non-Executive Director
b) Initial notification/Amendment Initial notification
3 Details of the issuer, emission allowance market participant, auction
platform, auctioneer or auction monitor
a) Name Southern Energy Corp.
b) LEI 213800R25GL7J3EBJ698
4 Details of the transaction(s): section to be repeated for (i) each type of
instrument; (ii) each type of transaction; (iii) each date; and (iv) each
place where transactions have been conducted
a) Description of the financial instrument, type of instrument Common shares in Southern Energy Corp..
Identification code CA8428131059
b) Nature of the transaction Subscription for new common shares
c) Price(s) and volume(s)
Effective price Volumes
1. CAD0.87 28,735
2. CAD0.87 17,241
3. CAD0.87 22,988
4. CAD0.87 91,954
5. CAD0.87 287,356
d) Aggregated information N/A (single transaction for each individual)
e) Date of the transaction 07 July 2022
f) Place of the transaction Outside of a trading venue
d)
Aggregated information
N/A (single transaction for each individual)
e)
Date of the transaction
07 July 2022
f)
Place of the transaction
Outside of a trading venue
TR-1: Standard form for notification of major holdings
NOTIFICATION OF MAJOR HOLDINGS (to be sent to the relevant issuer and to the
FCA in Microsoft Word format if possible)(i)
1a. Identity of the issuer or the underlying issuer of existing shares to SOUTHERN ENERGY CORP
which voting rights are attached(ii):
1b. Please indicate if the issuer is a non-UK issuer (please mark with an
"X" if appropriate)
Non-UK issuer
2. Reason for the notification (please mark the appropriate box or boxes with
an "X")
An acquisition or disposal of voting rights X
An acquisition or disposal of financial instruments
An event changing the breakdown of voting rights
Other (please specify)(iii): X
3. Details of person subject to the notification obligation(iv)
Name CANACCORD GENUITY GROUP INC
City and country of registered office (if applicable) VANCOUVER, CANADA
4. Full name of shareholder(s) (if different from 3.)(v)
Name DISCRETIONARY CLIENTS
City and country of registered office (if applicable) As above
5. Date on which the threshold was crossed or reached(vi): 05 JULY 2022
6. Date on which issuer notified (DD/MM/YYYY): 06 JULY 2022
7. Total positions of person(s) subject to the notification obligation
% of voting rights attached to shares (total of 8. A) % of voting rights through financial instruments Total of both in % (8.A + 8.B) Total number of voting rights held in issuer (8.A + 8.B) (vii)
(total of 8.B 1 + 8.B 2)
Resulting situation on the date on which threshold was crossed or reached 5.0361 5.0361 5,532,110
Position of previous notification (if N/a
applicable)
8. Notified details of the resulting situation on the date on which the
threshold was crossed or reached(viii)
A: Voting rights attached to shares
Class/type of Number of voting rights(ix) % of voting rights
shares
ISIN code (if possible)
Direct Indirect Direct Ind
ire
(DTR5.1) (DTR5.2.1) (DTR5.1) ct
(DT
R5.
2.1
)
CA8428133059 5,532,110 5.0361
SUBTOTAL 8. A 5,532,110 5.0361
B 1: Financial Instruments according to DTR5.3.1R (1) (a)
Type of financial instrument Expiration Exercise/ Number of voting rights that may be acquired if the instrument is % of voting rights
date(x)
Conversion Period(xi)
exercised/converted.
SUBTOTAL 8. B 1
B 2: Financial Instruments with similar economic effect according to DTR5.3.1R
(1) (b)
Type of financial instrument Expiration Exercise/ Physical or cash Number of voting rights % of voting rights
date(x)
Conversion Period (xi)
settlement(xii)
SUBTOTAL 8.B.2
9. Information in relation to the person subject to the notification
obligation (please mark the
applicable box with an "X")
Person subject to the notification obligation is not controlled by any natural
person or legal entity and does not control any other undertaking(s) holding
directly or indirectly an interest in the (underlying) issuer(xiii)
Full chain of controlled undertakings through which the voting rights and/or X
the
financial instruments are effectively held starting with the ultimate
controlling natural person or legal entity(xiv) (please add additional rows as
necessary)
Name(xv) % of voting rights if it equals or is higher than the notifiable threshold % of voting rights through financial instruments if it equals or is higher Total of both if it equals or is higher than the notifiable threshold
than the notifiable threshold
Canaccord Genuity Group Inc. 5.0361 5.0361
Canaccord Genuity Wealth Group Holdings Limited 5.0361 5.0361
Canaccord Genuity Wealth Group Holdings (Jersey) Limited 5.0361 5.0361
Canaccord Genuity Wealth Group Limited 5.0361 5.0361
Hargreave Hale Ltd 5.0361 5.0361
10. In case of proxy voting, please identify:
Name of the proxy holder
The number and % of voting rights held
The date until which the voting rights will be held
11. Additional information(xvi)
The change in holding is entirely due to the participation in the placing,
shares from which were admitted to AIM on the 5(th) July
Place of completion BLACKPOOL, ENGLAND
Date of completion 06 JULY 2022
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