Marquee Energy Ltd. (TSX-V: MQX), a Calgary based, junior energy company focused on light oil development and production in the Michichi area of eastern Alberta, has entered into a $30 million subordinated term loan with Crown Capital Fund IV, LP, an investment fund managed by Crown Capital Partners Inc.
The term loan bears an interest rate of 10% per annum over a term of five years and is second lien secured. In conjunction with the Term Loan, Marquee has granted Crown Capital 37,500,000 warrants or approximately 8.6% of the outstanding shares. Each warrant entitles Crown to purchase one common share of Marquee at an exercise price of $0.11 any time prior to May 30, 2021. The exercise price of the warrants represents a 46% premium to the 20-day volume-weighted average trading price of Marquee common shares at market close on May 29, 2017. If fully exercised, the warrants would represent approximately 8% of the fully diluted common shares outstanding.
Proceeds from the term loan will fully repay the previous syndicated loan, provide long term funding and liquidity certainty for the Company and support an expanded drilling program of high netback and high rate of return horizontal light oil wells at Michichi.
photo credit: Marquee Energy Ltd.