Canada’s Leucrotta Upsizes Syndicated Offering
Canadian Montney producer Leucrotta Exploration said March 16 it was upsizing a previously-announced bought deal financing to C$30 (US$24)mn from $20mn.
Under the terms of the amended offering, a syndicate of underwriters co-led by Haywood Securities and Echelon Wealth Partners has agreed to purchase 41.096mn units of Leucrotta at a price of C$0.73/unit. Each unit consists of one common share of the company and one-half of one common share purchase warrant, with each full warrant entitling the holder to acquire one common share at a price of C$1 for a period of 24 months.
Leucrotta has also agreed to grant the underwriters 30-day option to purchase up to 10% of the number of units sold in the offering on the same terms. If the option is exercised in full, an additional 4.1mn units will be purchased, increasing gross proceeds of the offering to just over C$33mn.
Alongside the bought-deal financing, Leucrotta will also conduct a non-brokered private placement of up to 2mn flow-through units, consisting of one common share and one share purchase warrant, at a unit price of C$0.75, for gross proceeds of C$1.5mn.
And the company has also entered into a definitive agreement to sell 5% of its non-strategic Montney lands – 10.25 sections or about 6,560 acres – for C$30mn.
Proceeds of the financing, expected to close on or about March 31, and the asset sale, expected to close on or about April 1, will be used to fund Leucrotta’s Mica Project, a multi-pad development targeting light oil and liquids-rich natural gas zones in the Lower Montney.
Full development at Mica, Leucrotta says, could add more than 30,000 barrels of oil equivalent (boe)/day of production over the next five years from 30 sections of land and one of three Montney horizons. Through Q3 2020, Leucrotta’s production averaged 3,266 boe/day, comprised of 14mn ft3/day of natural gas and 926 b/d of crude oil and natural gas liquids.