/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, BC, Aug. 1, 2023
/CNW/ - NG Energy International Corp. ("NGE" or the
"Company") (TSXV: GASX) (OTCQX: GASXF) is pleased to
announce that further to the Company's press releases dated
July 6, 2023 and July 10, 2023, it has closed its non-brokered
private placement offering (the "Offering") of senior
secured convertible debenture units (the "Debenture Units")
of the Company at a price of $1,000
per Debenture Unit for total aggregate gross proceeds of
$35,000,000.
Each Debenture Unit consists of: (i) one 10.0% convertible
senior secured debenture with a principal amount of $1,000 (each, a "Convertible Debenture")
maturing on July 31, 2026 (the
"Maturity Date"); and (ii) 1,000 common share purchase
warrants of the Company (each, a "Warrant"), with each
Warrant entitling the holder thereof to purchase one common share
of the Company (each a "Common Share") at an exercise price
equal to $0.90 for a period of three
(3) years ending July 31,
2026.
The principal amount of each Convertible Debenture will be
convertible, for no additional consideration, at the option of the
holder, in whole or in part, at any time and from time to time,
into Common Shares at a conversion price equal to $0.70, as described in the indenture that will
govern the Convertible Debentures.
Board of Director's Update
NGE is also pleased to announce that the changes to the board of
directors (the "Board") announced in the Company's
July 6, 2023 press release have been
made effective, subject to TSX Venture Exchange ("TSXV")
approval, with Mr. Brian Paes-Braga
joining the Board as the Company's Non-Executive Chair and Mrs.
Luz Stella Murgas, Mr. Don Sewell and Mr. Brian
O'Neill joining the Board as directors. Mr. Gordon Keep and Mr. Jeffrey Harder have retired from the Board.
Serafino Iacono, CEO of NGE,
commented: "I am very pleased to officially welcome our new Board
Chair and Board members, along with their significant capital
commitment to this company. These board members add exceptional
depth and experience to our team as we enter this new high growth
phase. With the closing of this financing, the Company is fully
focused on executing its development plans on Maria Conchita and
our flagship Sinu-9 project. I also wish to thank Jeffrey, who will
remain as an advisor to the Company for the next three months, and
Gordon for their hard work on behalf of the Company and wish them
well in their future endeavours."
Brian Paes-Braga, Chairman of
NGE, commented: "I want to personally thank all of our existing
shareholders and management who participated in this critical
financing, as well as welcome our new valued individual and
institutional investors in this round. It is a very exciting time
for our company and our stakeholders, with a number of important
milestones being achieved in Q3 this year. The Company now has the
capital it requires to move toward its goal of becoming an
important energy transition company for Colombia."
Sinu-9 JOA Agreement with Clean
Energy and Participation in VMM39
The Company is pleased to announce that concurrent with the
closing of the Offering, it has finalized and signed a joint
operating agreement with its partner in operations, Clean Energy,
which solidifies the working interest (WI) in the Sinu-9 block at
72% and adds a new asset to the Company's portfolio with an option
to acquire a 25% WI in the VMM39 block. VMM39 is located in
the center of Colombia in the
Middle Magdalena Basin, which is responsible for more than 1.4
billion barrels of oil. The Company will participate in the
San Diego-1X exploration well and
have an option to acquire a 25% WI in the VMM39 block through that
work, along with an additional option to increase its working
interest in the block to 50% after the first well is complete.
Insider Participation in the
Offering
Insiders subscribed for 6,100 Debenture Units in the Offering.
The private placement of Debenture Units to insiders is exempt from
the formal valuation and minority approval requirements of
Multilateral Instrument 61-101 – Protection of Minority Security
Holders in Special Transactions ("MI 61-101") and TSXV
Policy 5.9 by the application of sections 5.5(a) and (b) and
5.7(1)(a) of MI 61-101 because the Common Shares trade on the TSXV
and insider participation was less than 25% of the Company's market
capitalization as calculated for purposes of MI 61-101. No new
insiders were created, nor has there been any Change of Control
(pursuant to TSXV rules), as a result of subscriptions for
Debenture Units under the Offering. The Company did not file a
material change report more than 21 days before the expected
closing of the Offering, as the details and amounts of the insider
participation were not finalized until closer to the closing and
the Company wished to close the transaction as soon as practicable
for sound business reasons.
The Company further announces that, pursuant to the Offering,
Mr. Serafino Iacono and an entity to
which he provides investment advice subscribed for Debenture Units
in the principal amount of $1,000,000. Prior to this transaction,
Mr. Iacono directly and indirectly had beneficial ownership or
control over 13,662,339 Common Shares of the Company, representing
10.92% of the issued and outstanding Common Shares; convertible
debentures in the aggregate amount of $6,500,000, convertible into 5,416,666 Common
Shares; convertible debentures in the aggregate amount of
$2,750,000, convertible into
3,055,556 Common Shares; and 5,404,750 warrants and 1,235,000 stock
options of the Company; assuming the exercise of the convertible
securities, Mr. Iacono beneficially owned or controlled, in
aggregate, 28,774,311 Common Shares representing 20.52% of the
issued and outstanding Common Shares of the Company, on a partially
diluted basis. Following the Offering and due to the indenture
provisions described below, Mr. Iacono would continue to
beneficially own or control in aggregate 28,774,311 Common Shares
representing 20.52% of the issued and outstanding Common Shares of
the Company, on a partially diluted basis.
Mr. Iacono may in the future acquire or dispose of securities of
the Company, through the market, privately or otherwise, as
circumstances or market conditions warrant. A copy of the Early
Warning Report filed by Mr. Iacono may be obtained from the
Company's SEDAR profile.
Pursuant to the Offering, Mr. Brian
Paes-Braga directly or indirectly subscribed for Debenture
Units in the principal amount of $5,000,000. Prior to the Offering,
Mr. Paes-Braga had ownership or control over 10,054,220 Common
Shares of the Company, representing 8.04% of the issued and
outstanding Common Shares; 2,516,500 warrants of the Company and
375,000 stock options of the Company; assuming the exercise or
conversion of the convertible securities, Mr. Paes-Braga
beneficially owned or controlled in aggregate 12,945,720 Common
Shares representing 10.11% of the issued and outstanding Common
Shares of the Company, on a partially diluted basis. Following the
Offering, assuming the exercise or conversion of the Debenture
Units, Mr. Paes-Braga would beneficially own or control in
aggregate 25,088,577 Common Shares of the Company representing
17.9% of the issued and outstanding Common Shares of the Company,
on a partially diluted basis.
Mr. Paes-Braga may in the future acquire or dispose of
securities of the Company, through the market, privately or
otherwise, as circumstances or market conditions warrant. A copy of
the Early Warning Report filed by Mr. Paes-Braga may be obtained
from the Company's SEDAR profile.
The indentures that govern the Convertible Debentures and
Warrants, respectively, contain certain provisions, which provide
that holders of the Convertible Debentures and Warrants, as
applicable, together with any person or company acting jointly or
in concert with such holders, as determined in accordance with
National Instrument 62-104 – Take Over Bids and Issuer Bids ("NI
62-104") (the "Joint Actors") shall not be able to
convert their Convertible Debentures or exercise their Warrants, as
applicable: (i) to the extent that such conversion or exercise, as
applicable, would result in the holder beneficially owning or
exercising control over, in the aggregate, 9.99% of the total
issued and outstanding Common Shares, immediately after giving
effect to such conversion or exercise, as applicable; provided that
the Company, in its sole discretion, can waive the requirement for
any current Insider (as such term is defined in NI 62-104) of the
Company from time to time, and in such event, such Insider shall
not be able to subsequently convert any Convertible Debentures or
exercise any Warrants, as applicable, to the extent that such
conversion would result in the holder beneficially owning or
exercising control over, in the aggregate, 19.99% of the total
issued and outstanding Common Shares; or (ii) to extent such holder
together with any Joint Actors would be deemed to hold a number of
Common Shares sufficient to materially affect the control of the
Company, until the Company has received shareholder approval and
all applicable TSXV approvals in accordance with the policies of
the TSXV. As a result of these provisions, even if the Company were
to waive the first requirement, neither Mr. Iacono nor Mr.
Paes-Braga would not be entitled to exercise any of their
convertible securities if doing so would cause them, alone or in
conjunction with any Joint Actor, to beneficially own or exercise
control over, in the aggregate, 19.99% of the total issued and
outstanding Common Shares.
Pursuant to applicable Canadian securities laws, all securities
issued and issuable in connection with the closing of the Offering
will be subject to a four (4) month hold period ending December 1, 2023.
In connection with the Offering, the Company paid a finder's fee
of $200,500 to certain finders.
The Offering remains subject to final acceptance by the TSXV and
all regulatory approvals.
All dollar amounts are stated in Canadian dollars.
Net proceeds of the Offering will be allocated towards drilling
and rework activities at the Aruchara-3 and Aruchara-1 wells,
respectively, to fill pipeline capacity at Maria Conchita, the
Company's continued development costs at Sinu-9 and to advance the
Company's oil strategy with drilling activities at VMM39. The
Company will use the balance of the proceeds for working
capital.
About NG Energy International
Corp.
NG Energy International Corp. is a publicly traded E&P
company on a mission to provide a clean and sustainable solution to
Colombia's energy needs. The
Company intends on executing this mission by producing and bringing
gas to the premium priced Colombian gas market from SN-9, a 311,353
acres block which is adjacent to Canacol's Nelson field, as well as
Maria Conchita, a 32,518-acre block located in the region of La
Guajira. NGE's team has extensive technical expertise and a proven
track record of building companies and creating value in
South America. For more
information, please visit SEDAR (www.sedar.com) and the Company's
website (www.ngenergyintl.com).
Cautionary Statement Regarding
Forward-Looking Information
This news release contains "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of the applicable Canadian
securities legislation. All statements, other than statements of
historical fact, are forward-looking statements and are based on
expectations, estimates and projections as at the date of this news
release, including, without limitation, the information contained
in this news release regarding any development forecast, our
statements related to the use of proceeds of the Offering and the
Company's target production capacity. Any statement that
involves discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions, future events
or performance (often but not always using phrases such as
"expects", or "does not expect", "is expected", "anticipates" or
"does not anticipate", "plans", "budget", "scheduled", "forecasts",
"estimates", "believes" or "intends" or variations of such words
and phrases or stating that certain actions, events or results
"may" or "could", "would", "might" or "will" be taken to occur or
be achieved) are not statements of historical fact and may be
forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could cause actual results to differ materially from those
anticipated in these forward-looking statements are described under
the caption "Risks Factors" in the Company's most recent Management
Discussion and Analysis and its Annual Information Form dated
June 30, 2023, which are available
for view on SEDAR at www.sedar.com. These risks include but are not
limited to, the risks associated with the oil and natural gas
industry, such as exploration, production and general operational
risks, volatility of pricing for oil and natural gas, changing
investor sentiment about the oil and natural gas industry,
competition in the markets where the Company operates, any delays
in production, marketing and transportation of natural gas,
drilling costs and availability of equipment, regulatory approval
risks and environmental risks. Forward-looking statements contained
herein, including but not limited to the Company's
statements related to the use of proceeds of the Offering and
the Company's target production capacity are made as of the
date of this news release, and the Company disclaims, other than as
required by law, any obligation to update any forward-looking
statements whether as a result of new information, results, future
events, circumstances, or if management's estimates or opinions
should change, or otherwise. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader is
cautioned not to place undue reliance on forward-looking
statements.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE NG Energy International Corp.