VANCOUVER, May 12 /CNW/ - Grove Energy Limited ("Grove") (TSX-V & AIM:
GRV), the oil and gas exploration company with its primary assets in Europe
and the Mediterranean Margin, is pleased to announce that its has closed the
previously announced US$15 million private placement of subordinated
convertible notes (the "Notes"). The financing was underwritten by RAB Capital
plc's Energy Funds ("RAB"). Westwind Partners (UK) Limited ("Westwind") and
Mirabaud Securities Limited ("Mirabaud") acted as agents for this transaction.
Net proceeds, after fees and expenses of the financing, are estimated to be
US$14.5 million (C$16.2 million). RAB is to receive an underwriting fee of
US$60,000. Westwind and Mirabaud are entitled to aggregate commissions equal
to 2.5% in respect of the first US$11 million raised under the Note financing;
and a commission of 3.0% in respect of the remaining US$4 million raised under
the Note financing.
The Notes have a maturity of five years and bear an 8.75% annual coupon
payable half-yearly. The principal amount of the Notes may be converted into
common shares of Grove at a price of C$1.00 per common share:
(a) at the holder's election; and
(b) at Grove's election, if the weighted average price of common
shares on the TSX Venture Exchange ("TSX-V") is C$1.70 or greater
for a period of 25 consecutive days.
Interest may be paid in common shares or cash during the first year of
the term of the Notes at Grove's election and in subsequent years at the
holder's election. Common shares issued, if any, in respect of interest will
be issued for an amount that equates to a 10% discount to the 30-day weighted
average price of common shares on the TSX-V preceding the coupon payment date.
The Notes are subordinate to permitted encumbrances including, among others,
any banking facilities or other debt entered into to develop Grove's
properties and are secured by a general charge over Grove's assets.
The Notes and the underlying common shares are subject to four month hold
periods, pursuant to Canadian securities laws, expiring on 14 September 2006.
Glenn Whiddon, CEO, commented that: "We welcome RAB's continued support
and its creative input. Both Mirabaud and Westwind provided valuable
assistance with this transaction. The net proceeds of the financing will be
used to advance our exploration and development programs and I look forward to
reporting our progress."
GROVE ENERGY LIMITED
"Anthony Hawkshaw"
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Anthony Hawkshaw, Chief Financial Officer
Some of the statements contained in this release are forward-looking
statements. Forward looking statements include but are not limited to,
statements concerning estimates of recoverable hydrocarbons, expected
hydrocarbon prices, expected costs, statements relating to the continued
advancement of the Company's projects and other statements which are not
historical facts. When used in this document, and in other published
information of the Company, the words such as "could," "estimate," "expect,"
"intend," "may," "potential," "should," and similar expressions are forward-
looking statements. Although the Company believes that its expectations
reflected in the forward-looking statements are reasonable, such statements
involve risk and uncertainties and no assurance can be given that actual
results will be consistent with these forward-looking statements. Various
factors could cause actual results to differ from these forward-looking
statements including the potential for the Company's projects to experience
technical or mechanical problems, geological conditions in the reservoir may
not result in a commercial level of oil and gas production, changes in product
prices and other risks not anticipated by the Company or disclosed in the
Company's published material. Since forward-looking statements address future
events and conditions, by their very nature, they involve inherent risks and
uncertainties.
Neither the TSX Venture Exchange nor the AIM Market operated by London
Stock Exchange plc approves nor disapproves of the information contained
herein.
The information contained herein does not constitute an offer of
securities for sale in the United States, the United Kingdom, Canada, Japan or
Australia.
