Fireweed Energy prices $40M initial public offering (IPO)

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By Ted Liu

Fireweed Energy Ltd. has priced its proposed initial public offering for gross proceeds of $40 million or $46 million, assuming the over-allotment option is exercised in full.

Calgary based Fireweed Energy expects to issue between 7,272,727 and 8,888,888 common shares at an offering price between $5.50 and $4.50 per common share.

Fireweed Energy currently has 9,187,513 common shares outstanding. Predator Oil BC is the largest shareholder controlling 3,000,000 common shares at deemed value of $15 million, or 32.65% of outstanding common shares. In the event the offering price exceeds the deemed price of $5.00 per share, a portion of the 3,000,000 common shares issued to Predator Oil BC may be returned to Fireweed and subsequently cancelled.

Predator Oil BC received the 3 million shares as a portion of the $30 million selling price of major assets to Fireweed Energy. Predator Oil had previously bought a package of oil and gas assets and liabilities, including the major assets, from an unrelated third party for $6 million. Predator Oil sold the remaining assets of the package for $10 million and $5 million respectively to Tidewater Midstream and Infrastructure Ltd. and an arm’s-length third party .

Predator Oil BC is directly or indirectly owned by Stephen J. Holyoake, President & CEO and a director of Fireweed Energy, Joel A. MacLeod, Chairman of Tidewater Midstream and Infrastructure Ltd. and a director of Fireweed Energy, Donald Garner, a private oil and gas investor and former CEO of PrimeWest Energy Trust Inc.

The underwriting syndicate is co-led by National Bank Financial Inc. and Cormark Securities Inc., as co-lead underwriters and includingin CIBC World Markets Inc., Haywood Securities Inc., Macquarie Capital Markets Canada Ltd., RBC Dominion Securities Inc., Acumen Capital Finance Partners Limited, Eight Capital, AltaCorp Capital Inc., GMP Securities L.P., Beacon Securities Limited, Desjardins Securities Inc. and Industrial Alliance Securities Inc.

DLA Piper (Canada) LLP acts as legal counsel to Fireweed Energy while Burnet, Duckworth & Palmer LLP acts on hehalf of the underwriters.

Fireweed Energy is a Canadian junior oil and natural gas company focused on growth through exploration, development, production and acquisition programs in the WCSB.

Fireweed Energy commenced oil and gas activities in late 2016. Its core management team has previously started and grown several successful junior oil and gas companies that have realized positive returns for investors.

To date, Fireweed Energy has raised $16,763,652 through private placement equity financings, $1,384,000 of which was raised from Fireweed’s directors, officers, employees and their associates, and completed a number of strategic land acquisitions to cost-effectively build its NEBC Montney land position.

photo credit: Fireweed Energy