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Sprott Resource Corp. Announces Termination of Equity Financing By Subsidiary Orion Oil & Gas Ltd.
Sprott Resource Corp. Announces Termination of Equity Financing By Subsidiary Orion Oil & Gas Ltd.
About this update from Sprott Inc.
[{"type":"text","content":"\n\n\n\nNov. 11, 2009 (Canada NewsWire Group) -- TORONTO, Nov. 11 /CNW/ -- Sprott Resource Corp. (TSX: SCP) - Sprott Resource Corp. (\"SRC\") announced today that its subsidiary Orion Oil & Gas Ltd. (\"Orion\") will not be proceeding with its previously announced equity financing. On October 15, 2009, SRC announced that Orion had entered into an equity financing agreement, on a best efforts basis, with a syndicate of agents co-led by Cormark Securities Inc., FirstEnergy Capital Corp. and TD Securities Inc. (collectively, the \"Agents\"), pursuant to which Orion agreed to raise $100,000,000 (the \"Offering\") from the sale of subscription receipts (\"Subscription Receipts\") at a price of $5.00 per Subscription Receipt. The Agents have been unable to complete the Offering at the terms set forth above. Accordingly, SRC and Orion have decided to terminate the Offering.\"It is in SRC's best interests to request that the Offering be terminated given that the Agents were unable to complete the Offering at the proposed terms,\" said Kevin Bambrough, President and CEO of SRC. \"We feel that discounting the terms of the Offering would reduce the value creation opportunity for SRC that exists with Orion. As a result, SRC will maintain its 79.3% ownership of Orion and work with Orion's management to develop Orion's assets and pursue accretive acquisitions.\"Orion, through its wholly-owned subsidiary Auriga Energy Inc. (\"Auriga\"), operates in the Kaybob, Redwater and Bigstone areas of Alberta. Auriga has sufficient capital to fully fund the development of its properties. Auriga commenced an accelerated drilling program this week on its Kaybob property and intends to drill two gross wells (1.8 net wells) at Kaybob by the end of this year. In 2010, Auriga intends to drill 16 gross wells (14.5 net wells) at Kaybob and 16 gross wells (16 net wells) at Redwater wells as part of a proposed $80 million capital spending program for next year. The capital spending program for the next year is designed to Auriga's increase production to between 5,000 boe/d and 7,000 boe/d by the fall of 2010.About Sprott Resource Corp.SRC is a Canadian based company, the primary purpose of which is to invest, directly and indirectly, in natural resources. Through acquisitions, joint ventures and other investments, SRC seeks to provide its shareholders with exposure...