REG - Southern Energy Corp - RESULTS OF PLACING AND UPDATE ON OFFERING

Southern EnergyAnnouncement

24/06/2022 07:30

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RNS Number : 0964Q  Southern Energy Corp.  24 June 2022

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, AND THE
INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION
OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE
UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR
ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION
WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX TO THIS ANNOUNCEMENT, IS FOR
INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE: (A) A PROSPECTUS OR
OFFERING MEMORANDUM; (B) AN ADMISSION DOCUMENT PREPARED IN ACCORDANCE WITH THE
AIM RULES; OR (C) AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE
COMPANY.  THIS ANNOUNCEMENT AND THE APPENDIX DOES NOT CONSTITUTE OR CONTAIN
ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO
SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES OF SOUTHERN
ENERGY CORP. IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD
BE UNLAWFUL.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(REGULATION 596/2014/EU) AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON PUBLICATION OF THIS
ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS
NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

SOUTHERN ENERGY CORP. ANNOUNCES RESULTS OF PLACING AND UPDATE ON OFFERING

Calgary, Alberta - June 24, 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 successful completion of the Placing, as
part of the equity financing announced at 17:20 p.m. on 23 June 2022 (the
"Offering Announcement").  Defined terms used in this announcement have the
same meaning as given to them in the Offering Announcement, unless otherwise
defined herein.

Offering Highlights:

 

·    Due to strong demand, the size of the Placing in the UK was increased
from US$12.5 million to US$13.5 million, and when combined with the US$17.5
million Prospectus Offering the total size of the Offering has increased to
US$31.0 million

 

·    Offering expected to provide additional liquidity to the Company's
Common Shares on both AIM and the TSXV

 

·    Net proceeds of the Offering to be primarily used to accelerate the
initiation of a continuous organic drilling programme at Gwinville, as well as
increasing financial flexibility for potential accretive acquisition
opportunities

 

 

·    Further drilling at Gwinville expected to begin in Q4 2022

 

Ian Atkinson, President and CEO of Southern, commented:

"We are delighted to provide this update on the UK Placing regarding our
previously announced equity financing, which will raise over c. US$31.0
million for the Company, providing Southern with a strong balance sheet as we
finance the business for further, operationally driven growth. This funding
will allow us to pursue significant opportunity for accretive acquisitions in
our area of expertise and to continue to act nimbly and opportunistically as
we execute our growth strategy."

 

Further to the Offering Announcement, the Company has raised, in aggregate, c.
US$31.0 million (approximately £25.2 million/ C$40.3 million) (before
expenses) through the underwritten offering of 26,060,000 Common Shares at a
price of C$0.87 per Common Share pursuant to the Prospectus Offering
(excluding any Common Shares that may be issued pursuant to the over-allotment
option) and 20,311,927 new Common Shares at a price of 54.5 pence per Common
Share pursuant to the Placing. Accordingly, in aggregate 46,371,927 new Common
Shares are to be issued pursuant to the Offering, which represents 51.8% of
the existing common share capital of the Company prior to the Offering.

 

The Prospectus Offering is being undertaken on an underwritten bought-deal
basis led by Eight Capital, as lead underwriter and sole bookrunner, and
included Haywood Securities Inc. and Canaccord Genuity Corp. (collectively,
the "Underwriters") and is expected to close on or about 7 July 2022, subject
to customary closing conditions, including the approval of the TSX-V. Further
to the Offering Announcement, the Underwriting Agreement was entered into on
23 June 2022.

 

The Placing

 

The Placing was conducted by Canaccord Genuity Limited and H&P Advisory
Limited acting as joint bookrunners. The new Common Shares issued pursuant to
the Placing and the Prospectus Offering will be issued credited as fully paid
and will rank pari-passu in all respects with each other and the existing
Common Shares from their date of issue.

 

Further details of the Offering

 

The Company has applied to the London Stock Exchange for admission to trading
on AIM, and to the TSX-V for approval of the listing of, the Placing Shares
and Prospectus Shares ("Admission"). Subject to, inter alia, the Placing
Agreement having become unconditional and not having been terminated in
accordance with its terms, it is expected that admission to trading on AIM of
the Placing Shares will occur at 8:00 a.m. (UK) on or around 5 July 2022 (the
"Placing Shares Admission").

 

Subject to, inter alia, the Underwriting Agreement entered into between the
Company and the Underwriters having become unconditional and not having been
terminated in accordance with its terms, as well as final TSXV approval of the
listing of the Prospectus Offering Shares, it is expected that admission to
trading on AIM of the Prospectus Offering Shares will occur at 8:00 a.m. (UK)
on or around 7 July 2022.

 

The Placing and the Prospectus Offering are not inter-conditional (save that
the Placing is conditional upon the Underwriting Agreement remaining in force
in the period up to Placing Share Admission) and there can be no guarantee
that any particular element or elements of the Offering will be completed.

 

In accordance with the provision of the Disclosure Guidance and Transparency
Rules of the FCA ("DTRs"), the Company confirms that, immediately following
the Placing Shares Admission, the total number of Common Shares in the Company
in issue will be 109,848,785, each of which carries the right to vote, with no
Common Shares held in treasury. This figure may be used by shareholders as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the
Company under the DTRs.

 

The securities described herein have not been, and will not be, registered
under the U.S. Securities Act or any state securities laws, and accordingly,
may not be offered or sold within the United States except in compliance with
the registration requirements of the U.S. Securities Act and applicable state
securities requirements or pursuant to exemptions therefrom. This Announcement
shall not constitute an offer to sell or the solicitation of an offer to buy
any of the Company's securities to, or for the account or benefit of, persons
in the United States, nor shall there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful.
There has been and will be no public offer of the Company's securities in
Australia, Japan, South Africa, the United States or elsewhere, other than the
Prospectus Offering in each of the provinces of Canada, except Québec.

 

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 Offering, including the terms thereof
and the use of proceeds of the Offering, the Company's business strategy,
objectives, strength and focus, the Company's capital program for the
remainder of 2022, the Company's asset base including the development of the
Company's assets, expectations regarding production from the Company's
drilling operations in Gwinville and the timing thereof, ability to achieve
production estimates set out herein and future production levels.

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 Offering may not be
completed on favorable terms or at all, the risk that the Company may not be
able to obtain all necessary regulatory and stock exchange approvals,
including the approval of the TSXV and the London Stock Exchange, 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 Preliminary 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)

Canaccord Genuity Limited, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom is acting exclusively for the Company
and no one else in connection with the Placing and Admission, and Canaccord
will not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in relation to the
Placing or Admission or any other matters referred to in this Announcement.

H&P Advisory Limited, which is authorised and regulated by the Financial
Conduct Authority in the United Kingdom is acting exclusively for the Company
and no one else in connection with the Placing and Admission, and H&P will
not be responsible to anyone other than the Company for providing the
protections afforded to its clients or for providing advice in relation to the
Placing or Admission or any other matters referred to in this Announcement.

Neither of Canaccord or H&P nor any of their respective subsidiary
undertakings, affiliates or any of their respective directors, officers,
employees, advisers, agents or any other person accepts any responsibility or
liability whatsoever for, or makes any representation or warranty, express or
implied, as to the truth, accuracy, completeness or fairness of the
information or opinions contained in this Announcement (or whether any
information has been omitted from it) or any other information relating to the
Company, its subsidiaries or associated companies, whether written, oral or in
a visual or electronic form, and howsoever transmitted or made available or
for any loss howsoever arising from any use of this Announcement or its
contents or otherwise arising in connection therewith and any liability
therefore is expressly disclaimed.

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.

 

 

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