Saturn Oil & Gas Inc T.SOIL

Market didn't like the PP

[VeritasVern]

Not bad news I expect the sp to recover, especially if oil prices increase in 2024. The offering was given to 4 US institutional investors so that is good in terms of they clearly think that there will be a significant return on their investments.

• The offering was only for 2.2 million shares at $2.25 but with no warrants which is good.
• The $2.25 price was quite fair given the three month average was about that price point so no real discounts to the US buyers.
• The 2.2 million represents about and additional 1.6% of the shares out so not too dilutive.
• It is directed to the 2024 capital expenditure program and for work capital so at least it will be the driver of the capital expansion plan and increase output and profits for the company. the term loan is expected to be paid off by Q1 2026. Some 

[ppp]

The offering was for 22 mil shares 50 mil dollars. I for one don't understand what the reason was.  We have lots of FCF after CapX. 

[TerribleEng]

Yeah, This is 16% dilution. They have enough FCF to pay their amortization, they just needed to defer some capital spending... This is very very expensive financing for what to support a couple months of capex. Management should really stop this non-accretive financing if they every want to see a re-rate in their stock. They are addicted to dilution...at cost of capital rates greater than 50%...

[downtozero]

A concern is they did the share purchase so quickly. It probably means a debt payment came due they can't afford right now. Overall it's easy to see they aren't making enough money in 24 to keep inventory flat for the year and meet thier debt payment target. Hopefully this is the only share issue they need this year since it can kill the share price for months.

[ppp]

You are correct, pulled up their payment schedule. Lookes like 25 mil a month changing to 15 mil. Senior Term Loan On February 28, 2023, the Company entered into a Third Amended and Restated Senior Term Loan Agreement with its senior secured lender and expanded the Senior Term Loan by $375.0 million to an aggregate principal amount of $608.2 million at an

[borne2run]

It appears that the lenders mandated this $50 million offering.  Amended loan documents posted to Sedar yesterday.

[downtozero]

"Notwithstanding the foregoing, monthly principal payments in the aggregate amount of $50,723,387.26 payable to the Deferring Lenders on September 30, 2023 and December 31, 2023 shall be deferred by the Deferring Lenders until, and shall become due and payable in full on, the Stated Maturity Date." The deferred $50M doesn't come due to the maturity date. I don't see where $50M