Saturn Oil & Gas Inc. Announces the Closing of the Saskatchewan Asset Acquisition
In addition, the Company has repaid and retired the entire principal amount of the Company's previously outstanding Senior Secured Term Loan.
Saturn Oil & Gas Inc. announced the completion of the previously announced acquisition of oil-weighted assets in Southern Saskatchewan (the "Acquisition").
The net cash purchase price of the Acquisition was funded by proceeds of the recently closed 9.625% high yield note ("Note") offering, together with the proceeds of the recently closed $100 million bought deal subscription receipt (the "Subscription Receipts") financing.
In addition, the Company has repaid and retired the entire principal amount of the Company's previously outstanding Senior Secured Term Loan. Saturn's total current outstanding debt is now US$650 million.
Saturn has also secured a $150 million reserves-based loan ("RBL") lending facility led by National Bank of Canada and including ATB Financial and Goldman Sachs Bank USA, which is undrawn at closing. In accordance with their terms, each Subscription Receipt issued pursuant to the bought deal equity financing was exchanged for one common share in the capital of the Company (each, a "Common Share") concurrently with the closing of the Acquisition, and the net proceeds of approximately $96 million were released from escrow to fund a portion of the purchase price of the Acquisition. Holders of Subscription Receipts are not required to take any action in order to receive the underlying Common Shares, and the Subscription Receipts are expected to be de-listed from trading on the TSX as of the close of business on June 17, 2024.
"Saturn will continue to focus on generating high rates of return on invested capital and maximizing the free cash flow from our low decline, oil weighted producing assets in Saskatchewan and Alberta," commented John Jeffrey, Chief Executive Officer. "The expanded free cash flow, pro forma this acquisition, will be used to pay down the Notes on their scheduled 10% annual amortization schedule (to be paid quarterly) and for strategic tuck-in acquisitions. As the Company de-levers, Saturn intends to implement a shareholder return model utilizing dividends and share buy-backs, subject to approvals of the Toronto Stock Exchange and Saturn's board of directors."
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