Perpetual & Rubellite Announce Completion of Plan of Arrangement

Source: www.gulfoilandgas.com 9/3/2021, Location: North America

Perpetual Energy Inc. and Rubellite Energy Inc. are pleased to announce that the previously announced Plan of Arrangement under the Business Corporations Act (Alberta) (the "Plan of Arrangement") involving Perpetual, the shareholders of Perpetual, and Rubellite was completed on September 3, 2021 (the "Effective Date"). The completion of the Plan of Arrangement followed the overwhelming support of the Plan of Arrangement by the shareholders of the Company at its special shareholder meeting held on August 31, 2021 and the receipt today of the final order of the Court of Queen's Bench of Alberta approving the Plan of Arrangement.

Odd Lot Consolidation
Pursuant to steps in the Plan of Arrangement and as previously announced, Perpetual consolidated (the "Consolidation") its common shares ("Common Shares") on the basis of 1,000 to 1 (the "Ratio") and subsequently split the Common Shares (the "Split") on the same Ratio (the Consolidation and the Split are together, the "Share Capital Amendments"). Shareholders who own a number of Common Shares less than the Ratio (the "Consolidated Shareholders") will be paid an amount in cash of $0.3419 per Common Share, being the volume weighted average trading price of the Common Shares on the Toronto Stock Exchange ("TSX") for the 20-day period prior to the Effective Date (the "Consolidation Consideration"). Based on the Ratio, approximately 650,000 Common Shares will be cancelled as a result of the Consolidation and Perpetual will pay an aggregate of approximately $225,000 to the Consolidated Shareholders.

Following completion of the Consolidation, the Company will have approximately 64.0 million Common Shares outstanding. Letters of transmittal with respect to the Consolidation and the Plan of Arrangement were mailed out to all registered shareholders. All registered shareholders of Perpetual will be required to send their certificates representing pre-consolidation common shares with a properly executed letter of transmittal to Perpetual's transfer agent, Odyssey Trust Company, in accordance with the instructions provided in the letter of transmittal. Shareholders who hold their common shares through a broker or other intermediary and do not have Common Shares registered in their own name will not be required to complete a letter of transmittal.

Rubellite Warrants
Under the terms of the Plan of Arrangement, for every 46 common shares of Perpetual ("Common Shares") held, shareholders (other than Consolidated Shareholders) will receive 1 common share of Rubellite ("Rubellite Common Share") and 12 warrants to purchase Rubellite Common Shares ("Rubellite Warrants"). Each Rubellite Warrant entitles the holder to subscribe for one Rubellite Common Share at a price of $2.00 per share until 4:30 p.m. (Calgary time) on October 4, 2021 (the "Expiry Time"). The Rubellite Warrants effectively provide for a "rights offering" whereby shareholders will have the equal opportunity to purchase additional Rubellite Common Shares. Rubellite will raise approximately $33.4 million through the exercise of the Rubellite Warrants (the "Arrangement Warrant Financing") which is fully backstopped.

The Rubellite Common Shares and Rubellite Warrants have been conditionally approved for listing by the TSX. Trading in respect of the Rubellite Common Shares and Rubellite Warrants is expected to commence on or about Thursday September 9, 2021 under the symbols "RBY" and "RBY.WT", respectively.

Private Placement Financings
As previously announced, Rubellite will complete a non-brokered private placement of a minimum of $10.5 million to up to $20 million of Rubellite Common Shares at an issuance price of $2.00 per Rubellite Common Share (the "Non-Brokered Private Placement"). The Non-Brokered Private Placement is expected to close at the same time as the Arrangement Warrant Financing and brokered private placement for which $30 million is currently held in escrow (the "Brokered Private Placement" and collectively, the "Financings").

Any qualifying Shareholders or new investors who are "accredited investors" within the meaning of National Instrument 45-106 – Prospectus Exemptions, or other qualified persons in jurisdictions outside of Canada as determined by Rubellite and are interested in participating in the Non-Brokered Private Placement should contact the Company at PrivatePlacement@rubelliteenergy.com. Rubellite will use its reasonable commercial efforts to allow qualifying Shareholders or new investors to participate in the Non-Brokered Private Placement, subject to rejection or allotment as determined solely by Rubellite in whole or in part of their subscription amount. If any subscription amount is rejected or reduced by Rubellite, the subscription amount or any reduction to the subscription amount and all monies tendered therewith will be returned forthwith to the subscriber, without interest or deduction.

Concurrent with the completion of the Arrangement Warrant Financing and the Non-Brokered Private Placement, subscription receipts previously issued under the $30 million Brokered Private Placement will automatically be exchanged on a one-for-one basis for Rubellite Common Shares.

Proceeds from the Financings of approximately $73.9 million (assuming the minimum issuance under the Non-Brokered Private Placement) will be used to repay promissory notes in connection with Rubellite's acquisition of the Clearwater assets from Perpetual, and establish positive working capital to fund transaction costs and Rubellite's planned future drilling programs.


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