Calgary (pcJ News Briefs) – Epsilon Energy Ltd. (TSX: EPS) intends to complete a right offering to raise approximately C$25 million.
Each holder of Common Shares will receive one transferable right for each share held as of March 24, 2017 (Record Date). Five rights will entitle the holder thereof to subscribe for one common share upon payment of the subscription price until 4:30 p.m. (Toronto time) on the expiry date, expected to be April 19, 2017.
The subscription price will be determined in accordance with TSX rules after the market closes on March 16, 2017 before Epsilon’s rights offering circular is expected to be filed on March 17, 2017.
In connection with the offering, Epsilon Energy has entered into a backstop agreement with JVL Advisors, LLC, a limited liability company owned and controlled by John Lovoi, the company’s Chairman of the Board, which company currently owns, directly or indirectly, or exercise control or direction over, approximately 17.28% of the issued and outstanding common shares of Epsilon. JVL Advisors has agreed to subscribe for all of the common shares offered under the offering that are not otherwise purchased by shareholders. There are no fees or other remuneration associated with the backstop commitment. The backstop agreement was approved by the independent directors of the company.
Epsilon Energy intends to hold the net proceeds as a reserve for future capital expenditures, which will provide funds to finance the growth of its business and allow it to be able to react and respond to changing market conditions and potential acquisition opportunities.
Epsilon Energy Ltd. is a North American natural gas development, production and midstream company with a current focus on the Marcellus Shale of Pennsylvania.
photo credit: Epsilon Energy