Falcon Oil & Gas Ltd.
(“Falcon” or the “Company”)
US$10 million Private Placement with US Strategic Investor
And
US$6 million Acquisition of Overriding Royalty Interest
31 March 2022 - Falcon Oil & Gas Ltd. (TSXV: FO, AIM: FOG) is pleased to announce that it has received a subscription from Sheffield Holdings LP(“Sheffield”) for a US$10 million private placement through the issue of 62,500,000 Common Shares (“the Placing Shares”) at a price of CAD$0.20 per share (“the Placing”). Following the placement Sheffield will hold a total of 90,443,607 Common Shares of Falcon, representing 8.66% of Falcon’s issued and outstanding Common Shares.
Falcon Oil & Gas Australia Limited (“Falcon Australia”) has also agreed to grant Sheffield a 2% overriding royalty interest (“ORRI”) over Falcon Australia’s 22.5% working interest in the Beetaloo Sub-Basin exploration permits in return for a cash payment of US$6 million. The 2% ORRI is being granted to Sheffield calculated on equal economic terms as the existing 3% ORRI with the TOG Group. The cash proceeds of US$6 million will be used to exercise Falcon Australia’s call option to reduce the existing ORRI with the TOG group from 3% to 1%, which is expected to take place before 30 April 2022. The assets subject to the ORRI are not currently revenue generating and there are no profits or losses attributable to them. These changes to the ORRI’s, will be submitted to the Northern Territory Government, Australia for registration.
Details of the Placing
The completion of the Placing is subject to approval of the TSX Venture Exchange. A further update on Admission will be provided in due course. The Placing Shares will not trade on the TSX Venture Exchange Market until the date that is four months and a day after the day of issuance. The Company’s total issued share capital following Admission will be 1,044,347,425 Common Shares. The information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this Announcement this inside information is now considered to be within the public domain.
The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United State or to, of for the account or benefit of, U.S. persons absent registrations or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in which such offer, solicitation or sale would be unlawful.
Use of Funds
The Placing will add US$10 million to the Company’s cash balance of US$8.4 million as at 28 February 2022, which leaves Falcon in a strong financial position well ahead of future decisions on the Beetaloo project.
Philip O’Quigley (CEO of Falcon) commented:
“Falcon is very pleased that Bryan Sheffield of Sheffield Holdings LP has increased his strategic stake in the Company at this time. Bryan is a highly successful investor and has made significant returns in the US unconventional energy sector in the past. He was Founder of Parsley Energy Inc. (“PE”), an independent unconventional oil and gas producer in the Permian Basin, Texas and previously served as its Chairman and CEO.
PE was acquired for over US$7 billion by Pioneer Natural Resources Company (“Pioneer”), itself a leading independent oil and gas company and with the PE acquisition became a Permian pure play company. Pioneer has a current market capitalisation of c. US$60 billion.”
Bryan Sheffield of Sheffield Holdings LP commented:
‘‘Falcon and its partner have the largest acreage (4.6 million acres) position centred over the Beetaloo Sub-Basin. The Beetaloo is emerging as a world class shale gas basin with stacked pay potential from several shale intervals. Flow tests from the B Shaleof the Amungee Member have confirmed a productive dry gas system in place. Geologic and engineering data from test wells across the Sub- basin have similar properties to some of the highly successful shale gas plays in the United States. The Beetaloo Sub-Basin is still in the exploration and appraisal phase, but with continued good well results, Falcon is well positioned to become a key supplier of low carbon energy to Australia and to the world within a few short years. I am delighted to have this opportunity to acquire a significant interest in Falcon and gain exposure to their net 1 million acres in what may become one of the biggest shale plays in the world.’’
https://www.research-tree.com/…royalty-interest--1380859
