TSXV ticker symbol: BEN
CALGARY, July 4, 2014 /CNW/ - Butte Energy Inc. (the "Corporation") (TSXV: BEN) is pleased to announce that it intends to complete a
non-brokered private placement of up to $16 million of common shares of
the Corporation, on a post-consolidation basis (the "Offering").
The Offering will be subject to the consolidation of the issued and
outstanding common shares of the Corporation (the "Consolidation") on the basis of up to five (5) pre-consolidation common shares of the
Corporation ("Pre-Consolidation Shares") for every one (1) post-consolidation common share (a "Post-Consolidation Share"), or at any final ratio as the board of directors of the Corporation
may determine to be appropriate (the "Consolidation Ratio"). The Corporation currently intends to seek shareholder approval for
the Consolidation at its next annual meeting of shareholders.
Assuming completion of the Consolidation, the Corporation will issue
Post-Consolidation Shares using a pre-consolidation price of $0.25 per
share for aggregate gross proceeds of up to $16,000,000, under the
Offering.
The closing of the Offering is expected to occur prior to the end of
July 2014 and is subject to the completion of formal documentation,
shareholder approval of the Consolidation and receipt of regulatory
approval, including the conditional approval of the TSX Venture
Exchange (the "Exchange").
The Corporation intends to use the net proceeds from the Offering for
proving up the Corporation's existing and new prospects in Alberta as
well as working capital for ongoing operations.
In connection with the Consolidation and the Offering, the Corporation
also intends to enter into debt settlement agreements to settle the
Corporation's outstanding non-bank debt in the aggregate of up to $11
million owing to two creditors of the Corporation (the "Debt Settlements"), each of whom is an insider of the Corporation, by the issuance of
Post-Consolidation Shares using a pre-consolidation price of $0.50 per
share.
It is expected that shareholder approval for the Debt Settlements will
be sought at the Corporation's next annual meeting of shareholders.
The Debt Settlements will be subject to completion of formal
documentation and receipt of shareholder and regulatory approval,
including the conditional approval of the Exchange.
All Post-Consolidation Shares issued pursuant to the Offering and the
Debt Settlement shall be subject to a four (4) month statutory hold
period from the closing date.
Information Regarding the Corporation
The Corporation is an emerging oil and gas company engaged in the
exploration for and development and production of oil and natural gas
reserves in Western Canada. The Corporation's common shares trade on
the Exchange under the symbol "BEN".
Neither the TSX Venture Exchange, Inc. nor its Regulation Service
Provider (as that term is defined under the policies of the TSX Venture
Exchange) has neither approved nor disapproved of the contents of this
press release.
Not for distribution to U.S. Newswire Services or for dissemination in
the United States. Any failure to comply with this restriction may
constitute a violation of U.S. Securities laws.
Forward looking information
This news release contains "forward-looking information" within the
meaning of applicable securities laws. These statements relate to
future events or future performance. The use of any of the words
"could", "intend", "expect", "believe", "will", "projected",
"estimated" and similar expressions and statements relating to matters
that are not historical facts are intended to identify forward-looking
information and are based on the Corporation's current belief or
assumptions as to the outcome and timing of such future events. Actual
future results may differ materially. In particular, this release
contains forward-looking information relating to the completion and
timing of the Offering and the Debt Settlements, the use of proceeds of
the Offering and the intention to seek shareholder approval for the
Consolidation and the Debt Settlements. Various assumptions or factors
are typically applied in drawing conclusions or making the forecasts or
projections set out in forward-looking information. Those assumptions
and factors are based on information currently available to the
Corporation. The material factors and assumptions include that
management will be able to raise adequate proceeds from the Offering,
that the Corporation will obtain all necessary regulatory approvals for
the Offering, the Debt Settlements and the Consolidation, and that the
board of directors will not determine that it is in the best interests
of the Corporation to change the intended use of proceeds or not to
proceed with seeking shareholder approval of the Consolidation and the
Debt Settlements. Risk Factors that could cause actual results or
outcomes to differ materially from the results expressed or implied by
forward-looking information include, among other things: the failure to
obtain the required approvals for the Offering, the Debt Settlements or
the Consolidation in a timely fashion or at all, the ability for the
Corporation to enter into agreements respecting the Debt Settlements,
general economic conditions, market risks relating to the oil and gas
industry in general (e.g., operational risks in development,
exploration and production; delays or changes in plans with respect to
exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and
projections relating to production, costs and expenses; health, safety
and environmental risks; commodity price and exchange rate
fluctuations; and uncertainties resulting from potential delays or
changes in plans with respect to exploration or development projects or
capital expenditures). The Corporation cautions the reader that the
above list of risk factors is not exhaustive. The forward-looking
information contained in this release is made as of the date hereof and
the Corporation is not obligated to update or revise any
forward-looking information, whether as a result of new information,
future events or otherwise, except as required by applicable securities
laws. Because of the risks, uncertainties and assumptions contained
herein, investors should not place undue reliance on forward-looking
information. The foregoing statements expressly qualify any
forward-looking information contained herein.
SOURCE Butte Energy Inc.
