Novus Energy Inc NOVUF

Acquisitions & Financing - April 27 News

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Last week Hugh was in Texas (people that know oil!) promoting Novus.  They asked Hugh to do a financing - they wanted in.  It is common knowledge that Novus was operating fine without it, $18m still in the bank, was not planning on a financing. 

However, with this new money, they will be able to even more aggressively acquire land while it is still available and also step up drilling which will increase production and cash flow faster.  Grow the company faster.

They have been extremely aggressive in the execution of their acquisition and drilling plans.  So I have no doubt that they will use the money very, very well, as they have been demonstrating.  This Dodsland, Viking land won't be around much longer - it's better they have the money now to 'play' with.

This should be the last financing they will ever need, as their oil production will fund the company from now on.

Note, the financing was over-subscribed with NO warrants. 

We all own a company that others want a part of.  ;-)
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* Per previous post by dman34, the amount has increased to $25m.  I am posting this because of the new acquisitionsannounced in this NR that were not included in the $25m NR from today. 


Novus Energy Inc Announces $20 Million Bought Deal Financing

TSX-V: NVS
April 27, 2010

CALGARY, ALBERTA – Novus Energy Inc. ("Novus" or the "Company") (TSX VENTURE:NVS) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc. and including GMP Securities L.P., Canaccord Financial Ltd., Haywood Securities Inc., Mackie Research Capital Corporation, CIBC World Markets Inc., Clarus Securities Inc., Raymond James Ltd., Desjardins Securities Inc., Jennings Capital Inc., Jacob Securities Inc., and Thomas Weisel Partners Canada Inc. (collectively the "Underwriters"), pursuant to which the Underwriters have agreed to purchase on an "bought deal" basis 18,185,000 common shares ("Common Shares") of Novus at a price of $1.10 per Common Share for aggregate gross proceeds of approximately $20.0 million (the "Offering").

Proceeds of the Offering will be used to fund the Company's ongoing capital program, to develop and expand its core area of operations, to pursue acquisition opportunities and for general corporate purposes.

The Offering is scheduled to close on or about May 18, 2010 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. The Common Shares will be offered in all provinces of Canada (other than Quebec) by way of short form prospectus, and in the U.S. on a private placement basis pursuant to exemptions from registration requirements.

Novus is also pleased to announce that it has entered into two separate non-binding agreements to acquire assets within its core area of Dodsland, Saskatchewan.

Under the terms of the first agreement, Novus will acquire 4,800 net acres (7.5 net sections) of prospective land in the Viking oil resource play at Dodsland, Saskatchewan for the consideration of $1.3 million in cash and the issuance of 390,000 common shares of Novus.

Pursuant to the terms of the second agreement, Novus will acquire 960 acres (1.5 net sections) of key lands immediately offsetting the Company's current drilling activity in the Dodsland area for consideration of $1 million in cash.

The acquisition of the 5,760 acres (9.0 net sections) will provide Novus with continued expansion opportunities within its core area located in the Viking oil resource play of Dodsland, Saskatchewan. 
Novus has identified 15 net horizontal drilling locations targeting the Viking light oil formation on the acreage to be acquired.

Upon closing these transactions, Novus will have approximately 33,460 net acres (52.25 net sections) of land in the Dodsland area, increasing the Company's drilling inventory to 165 net horizontal Viking oil drilling locations, assuming a drilling density of 4 wells per section.

(Note - they think they can drill 8 - 12 wells per section, as others are starting to do in the Viking.  Think what that will do to the bottom line.)

Since March 2010, Novus has drilled and cased a total of ten Viking horizontal wells and continues to drill its large inventory during its spring drilling program. Completion operations are underway with multi stage fracing commencing this week.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or 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 any jurisdiction in which such offer, solicitation or sale would be unlawful.

Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with development and exploration drilling. After the closing of the Offering, Novus' strong financial position will allow for the exploitation of its drilling inventory and expansion of the Company's opportunity suite through internally generated prospects and strategic light oil acquisitions.

Novus Shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has 142.5 million common shares outstanding.


For further information please contact:

Hugh G. Ross
President and CEO
Telephone: [phone]
Fax: [phone]

or

Ketan Panchmatia
VP Finance and CFO
Telephone: [phone]
Fax: [phone]