Saturn Oil & Gas Inc. Announces Closing of Acquisition and Private Placement

Source: www.gulfoilandgas.com 2/28/2022, Location: North America

Saturn Oil & Gas Inc. has successfully completed the previously announced strategic acquisition (the "Strategic Acquisition") and intends to complete a non-brokered private placement for gross proceeds of $2,190,000 (the "Non-Brokered Private Placement").

Strategic Acquisition
The Strategic Acquisition closed today, with an effective date of January 1, 2022, for a net cash purchase price of $7.9 million. The assets consist of approximately 240 bbl/d of high netback light oil production and has a strong synergistic fit, including:
- Located in Saturn’s core Viking business unit;
- An excellent licensee liability rating (LLR) > 3.0;
- Reduces the Company’s overall royalty rates and operating costs per boe; and
- Estimated 2022 operating netback on acquired production of $60.50/bbl for a PDP Recycle Ratio of 3.2x. (1)

“In addition to the superior netback oil production, the Strategic Acquisition contributes numerous high quality drilling development wells and abundant exploration locations for Saturn’s long-term growth,” commented Justin Kaufmann, Senior Vice-President, Exploration. “The Strategic Acquisition puts Saturn in a better position to take advantage of the Viking asset during a period of high commodity prices while continuing to grow the Oxbow Asset with the drill bit.”

Concurrent Non-Brokered Private Placement
Concurrent with its previously announced upsized bought deal prospectus financing, Saturn intends to complete a Non-Brokered Private Placement of units ("Units") by issuing an aggregate of 730,000 Units at a price of $3.00 per Unit for aggregate gross proceeds of $2,190,000. Each Unit will consist of one common share (a "Share") and one common share purchase warrant of the Company (a "Warrant"). Each Warrant will be exercisable to acquire one Share for 36 months following the Closing Date, at an exercise price of $4.00, subject to adjustment in certain events. The Company will make reasonable efforts to list the Warrants on the TSX Venture Exchange ("TSXV").

The Non-Brokered Private Placement will facilitate participation of strategic existing shareholders from Europe structurally unable to participate in the concurrent bought deal prospectus financing.

“The proceeds of current equity financings will allow for a much-expanded capital expenditure budget for 2022 and allow the company to accelerate its production growth in the current high oil price environment,” stated John Jeffrey, CEO of Saturn. “We expect that the incremental growth in the Company’s cash flow will far exceed the dilution of the financings and will be to the long-term benefit of all shareholders.”

Saturn intends to provide a corporate update as well as its 2022 capital expenditure budget and related financial guidance after the closing of the previously announced upsized bought deal prospectus financing expected on or about March 10, 2022.

The Company intends to use the net proceeds of the Non-Brokered Private Placement to expand capital expenditures, for working capital and general corporate purposes. Closing of the Non-Brokered Private Placement is expected to occur on or about March 10, 2022, or such other date as the Company may choose (the "Closing Date") and is subject to customary closing conditions, including, the approval of the TSXV. The Non-Brokered Private Placement will take place by way of a private placement pursuant to applicable exemptions from the prospectus requirements in those jurisdictions where the Non-Brokered Private Placement can lawfully be made, including the United States under private placement exemptions. The Shares and Warrants shares issued pursuant to the Non-Brokered Private Placement will have a hold period of four months and one day from the Closing Date in accordance with applicable securities laws.


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