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Caza Oil & Gas Announces Execution of $12,000,000 Loan Agreement and Standby Equity Distribution Agreement
By: Marketwired .
Nov. 26, 2012 02:00 AM
HOUSTON, TEXAS -- (Marketwire) -- 11/26/12 -- Caza Oil & Gas, Inc. ("Caza" or the "Company") (TSX:CAZ) (AIM:CAZA) is pleased to announce today that it has entered into a GBP 6 million Standby Equity Distribution Agreement ("SEDA") and a US$12 million SEDA-backed Loan Agreement with YA Global Master SPV Ltd., an investment fund managed by Yorkville Advisors Global, LP ("Yorkville"). These facilities will provide Caza flexibility for future capital funding and meeting the costs of continued drilling of the Bone Spring play in New Mexico.
Caza received an initial draw-down of US$2.2 million on the Loan Agreement and may draw a second advance of US$1.8 million at its discretion. Additional draw-downs may be made with the mutual agreement of the parties. Loan repayment is supported by the SEDA facility, allowing Caza the option to issue equity at a 5% discount to market to fund any loan repayment as well as any balance of well costs.
W. Michael Ford, Chief Executive Officer commented:
"We are pleased to enter into the SEDA and Loan agreements. These facilities provide the Company with flexible funding options, which currently are a cost effective arrangement for obtaining capital to develop the Company's assets, including our inventory of Bone Spring properties. We believe this arrangement is an efficient way to meet our short-term capital requirements and provide an opportunity to capitalize on drilling opportunities in order to maximize shareholder value."
The loan bears interest at a rate of 9% per annum and may be prepaid without penalty. The initial draw-down and the second draw-down are repayable in monthly instalments over a period of one year from the date of advance, with repayments weighted towards the end of each term. In connection with each draw-down, Yorkville is entitled to receive an 8% implementation fee and a specified number of Common Share purchase warrants. The warrants have a term of three years and entitle the holder to acquire one Common Share at an exercise price of 125% of the market price calculated in accordance with the Loan Agreement. In connection with the initial draw-down Caza issued to Yorkville 1,055,224 warrants having an exercise price of US$0.33.
The SEDA facility provides for Yorkville to subscribe for up to GBP 6 million of Common Shares over a term of three years. The timing and amount of advances are at Caza's discretion. Subject to any minimum price specified by Caza in advance, shares sold under the SEDA are priced at 95% of the prevailing market price on the AIM calculated in accordance with the SEDA during a 10-day pricing period, which may be extended by mutual agreement. Unless otherwise agreed, each advance may not exceed GBP 1 million, 400% of the average daily value traded of Caza's Common Shares on AIM for the five trading days immediately prior to date of an advance request or result in Yorkville holding more than 2.99% of Caza's outstanding Common Shares
Caza is engaged in the acquisition, exploration, development and production of hydrocarbons in the following regions of the United States of America through its subsidiary, Caza Petroleum, Inc.: Permian Basin (West Texas and Southeast New Mexico) and Texas and Louisiana Gulf Coast (on-shore).
Information in this news release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws. Such information is often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "schedule", "continue", "estimate", "expect", "may", "will", "hope", "project", "predict", "potential", "intend", "could", "might", "should", "believe", "develop", "test", "anticipation" and similar expressions. In particular, information regarding the availability of Advances, and Caza's use of the proceeds of an Advance contained in this news release constitutes forward-looking information within the meaning of securities laws.
For more exhaustive information on these risks and uncertainties you should refer to the Company's most recently filed annual information form which is available at www.sedar.com and the Company's website at www.cazapetro.com. You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as may be required by securities laws.
This news release is not for dissemination in the United States or to any United States news services. The Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.
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