Artisan Provides Corporate Update and Announces Non-Brokered Private Placement
23 April 2014 - 2:15PM
Marketwired
Artisan Provides Corporate Update and Announces Non-Brokered
Private Placement
CALGARY, ALBERTA--(Marketwired - Apr 23, 2014) - Artisan Energy
Corporation ("Artisan" or the "Corporation") (TSX-VENTURE:AEC)
announces that it will not be proceeding with its previously
announced purchase and sale agreement with Magnum Energy Inc.
(TSX-VENTURE:MEN) relating to Magnum's 50% operated working
interest in the Provost area of Alberta (the "Magnum Acquisition").
In addition, Artisan has withdrawn its short form prospectus
brokered financing.
Non-Brokered
Convertible Debenture Private Placement
Artisan has agreed
to undertake a non-brokered private placement of up to $5.0 million
(the "Private Placement") of secured convertible debentures (the
"Convertible Debentures") with a group that has participated in
both of the Corporation's previous non-brokered common share
private placements. The Private Placement is scheduled to close on
May 31, 2014.
The Convertible
Debentures will have a term of 3 years from the date of closing of
the Private Placement, will bear an annual interest rate of 9% to
be paid quarterly and will be convertible into common shares of
Artisan at $0.60 at any time prior to expiry or redemption. Artisan
may redeem the Convertible Debentures without penalty at any time,
however regardless of any such early redemption Artisan will be
committed to payment of a minimum of 18 months of interest. Artisan
may pay a cash commission of 6% on the gross value of subscriptions
introduced to the Corporation by eligible parties. The proceeds
from the Private Placement will be used to fund the Corporation's
working capital deficiency and to conduct some minor operations.
Closing of the Private Placement and issuance of the Convertible
Debentures is subject to approval by the TSXV.
Extension of Current
Loan Facility
The Corporation has
a loan facility, which is currently drawn to approximately
$3,740,000, from Tallinn Capital Corp. (the "Lender") and which was
to have matured on April 30, 2014 (the "Loan Facility"). The
Corporation entered into a commitment letter with the Lender to
amend the Loan Facility. The key provisions of the amendments
include, but are not limited to, an extension of the maturity date
from April 30, 2014 to July 31, 2014. Conditional on closing the
non-brokered convertible debenture private placement, the
Corporation expects a further extension of the Loan Facility to
December 31, 2014.
Additional
Production Acquisitions
Based on feedback
received while undertaking the short form prospectus financing
process with respect to funding the Magnum Acquisition, Artisan's
management believes that it will have a much greater likelihood of
funding a strategic acquisition that provides a larger production
platform and greater upside drilling potential. The Corporation is
currently pursuing the acquisition of various assets producing
between 175 to 400 boe/d and is in ongoing discussions with parties
regarding accessing the means to finance such acquisitions.
Marketing of
Non-Core Assets for Disposition
Artisan has decided
to formally market non-core assets in an effort to reduce debt and
make capital available for its core properties at Chip Lake and
Tomahawk, Alberta. Artisan plans to retain an agent that
specializes in marketing oil and gas assets to conduct the formal
marketing of its non-core assets.
Reserves and
Corporate Direction Update
Artisan anticipates
that it will release its December 31, 2013 reserves update on or
before April 30, 2014. The updated reserves information will
include an evaluation of Artisan's second and third horizontal
Belly River light oil wells on its Ferrybank Assets, plus for the
first time an evaluation of Artisan's Tomahawk Wilrich liquids rich
gas project which was recently successfully tested in the 1-
20-52-7W5 vertical well.
Artisan's primary
corporate focus will continue to be on funding its developmental
Rock Creek light oil horizontal drilling opportunities at Chip
Lake, Alberta and on strategically positioning and advancing its
large-scale Wilrich liquids rich gas property at Tomahawk, Alberta.
Artisan will also strategically look to expand its positions in
these two core areas. In addition, Artisan will be pursuing the
acquisition of production platforms that either complement
Artisan's existing core assets or that are within Artisan's
management's core regions of experience within Alberta.
Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this news
release.
Advisory
This news
release contains forward-looking statements and information
("forward-looking statements") within the meaning of applicable
securities laws relating to the Private Placement and the
Corporation's proposed plans to acquire additional producing assets
and dispose of non- core assets. Readers are cautioned to not place
undue reliance on forward-looking statements. While Artisan
believes the expectations reflected in the forward-looking
statements are reasonable, actual results and developments may
differ materially from those contemplated by these statements
depending on, among other things, the nature of the capital and
debt markets and factors beyond Artisan's control. The
forward-looking information contained in this news release is made
as at the date of this news release and Artisan does not undertake
any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by applicable
securities laws. Readers are urged to consider these factors
carefully in evaluating any forward-looking information.
Additional
information on other factors that could affect Artisan's operations
and financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com).
Where amounts
are expressed on a barrel of oil equivalent ("boe") basis, natural
gas has been converted at a ratio of six thousand cubic feet to one
boe. This ratio is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Boe's may be misleading,
particularly if used in isolation.
Artisan Energy CorporationRick IronsidePresident & CEO(403)
984-9275Rironside@artisanenergy.caArtisan Energy CorporationJohn
BellVice-President Finance & CFO(403)
984-9275Jbell@artisanenergy.cawww.artisanenergy.ca
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