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CGX Provides Update on Near Term Funding Requirements - Announces $30 Million Investment by Pacific Rubiales
(TSX-V | OYL) TORONTO, May 28, 2012 /CNW/ - CGX Energy Inc. (TSX-V - OYL) ("CGX" or t...
About this update from Cgx Energy Inc.
[{"type":"text","content":"\n\n\n\n\n\n(TSX-V | OYL)\n\n\nTORONTO, May 28, 2012 /CNW/ - CGX Energy Inc. (TSX-V - OYL) (\"CGX\" or\n the \"Company\") announced on May 7, 2012 cost increases on its Eagle-1\n well and the need to raise approximately $20 million in the near term. \n The initial cost estimate for the Eagle-1 well was $55 million\n increasing to $71 million on May 7. But now as final costs accumulate,\n the ultimate cost is estimated to be approximately 10% higher than\n estimated on May 7. To meet its near term funding requirements, the\n Company is pleased to announce that it has entered into a definitive\n subscription agreement (the \"Subscription Agreement\") with Pacific\n Rubiales Energy Corp. (\"Pacific Rubiales\") dated May 27, 2012 pursuant\n to which Pacific Rubiales has subscribed for 85,714,285 units of CGX\n (the \"Units\") by way of private placement at a price per Unit of $0.35\n for an aggregate purchase price of $30 million.  Each Unit will consist\n of one common share and one-half of one common share purchase warrant\n of the Company (each whole warrant, a \"Warrant\").  Each Warrant will be\n exercisable for one CGX common share at an exercise price of $0.60 per\n common share for a period of 18 months following the date of issuance\n of the Units.  All common shares that comprise the Units and any common\n shares issued on exercise of the Warrants will be subject to a four\n month hold period from the date of issuance of the Units.  The proceeds\n from the private placement will be used to fund expenditures related to\n the Company's oil and gas exploration activities in the Guyana-Suriname\n Basin and for general corporate purposes. The private placement is\n subject to approval of the Company's shareholders (as described below)\n and acceptance by the TSX Venture Exchange (the \"Exchange\").  The Units\n are expected to be issued within a week following the required Exchange\n and shareholder approval.\n\n\nPacific Rubiales currently owns approximately 18% of the Company's\n issued and outstanding common shares and is an insider of the Company. \n As a result, the private placement is considered a Related Party\n Transaction (as that term is defined in the policies of the Exchange\n and applicable securities laws).  The private placement will result in\n Pacific Rubiales becoming a...