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.