Finance & Investing | Private Equity | Deals - Acquisition, Mergers, Divestitures | Capital Markets

Edge Resources Teams Up in a Buyer's Market

Share Print Bookmark    |    Tuesday,July 28,2015

Edge Resources Inc. has announced that it has closed a private placement for gross proceeds of CDN$500,000 with a new, strategic investor group.

The private placement subscription was completed by the Investor Group at a price of $0.08 per share, representing a 10.5% premium to the previous 10 day end-of-day volume weighted average price. A finder's fee equivalent to 5% of the gross proceeds was paid in cash. The net proceeds will be used to support the Company's ongoing acquisition strategy.

The funding is a planned first step by this Investor Group who has indicated an intention to become a significant new, long-term capital partner through the funding of several potential acquisitions in the coming months.

Edge expects the availability of high-return projects to increase in the future, facilitated by (i) lack of sustaining cash flow amongst junior E&P companies resulting in a lack of drilling and; therefore, intensified production declines and (ii) less patient lenders for E&P companies that lack strong capital partners and/or sustaining cash flow.

Brad Nichol, Edge's President and CEO commented: "Being able to raise new capital in this very challenging market is an accomplishment that few have been able to demonstrate. We have consistently proven it to be one of our core strengths and it is an absolutely critical competitive advantage in our industry; and one that is currently enjoyed by few. To have a new capital partner commit now, as we embark on an aggressive growth strategy through consolidation of medium and heavy oil assets, signifies a major kick-start to Edge becoming one of Canada's high-growth E&P companies. I am especially excited that the Investor Group, combined with the support of our current lenders and major shareholders, should allow us to expand our existing production and growth profile as acquisition prices approach historical lows. We aim to become one of the largest E&P companies focused on medium and heavy oil, for the sole benefit of our existing and new shareholders, and today's news is a significant step in that direction.”