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2022-ENEnglishNews Release

Saturn Oil & Gas Inc. Announces Closing of Acquisition and Private Placement

By February 28, 2022October 30th, 2023No Comments

**CALGARY, ALBERTA – February 28, 2022** – Saturn Oil & Gas Inc. (TSXV: SOIL) (FSE: SMKA) (“**Saturn**” or the “**Company**”) is pleased to announce it has successfully completed the previously announced strategic acquisition (the “**Strategic Acquisition**”) and intends to complete a non-brokered private placement for gross proceeds of $2,190,000 (the “**Non-Brokered Private Placement**”).

**Strategic Acquisition**
The Strategic Acquisition closed today, with an effective date of January 1, 2022, for a net cash purchase price of $7.9 million. The assets consist of approximately 240 bbl/d of high netback light oil production and has a strong synergistic fit, including:
– Located in Saturn’s core Viking business unit;
– An excellent licensee liability rating (LLR) > 3.0;
– Reduces the Company’s overall royalty rates and operating costs per boe; and
– Estimated 2022 operating netback on acquired production of $60.50/bbl for a PDP Recycle Ratio of 3.2x. (1)

*(1) Assuming US$75 WTI oil price for 2022*

“In addition to the superior netback oil production, the Strategic Acquisition contributes numerous high quality drilling development wells and abundant exploration locations for Saturn’s long-term growth,” commented Justin Kaufmann, Senior Vice-President, Exploration. “The Strategic Acquisition puts Saturn in a better position to take advantage of the Viking asset during a period of high commodity prices while continuing to grow the Oxbow Asset with the drill bit.”

**Concurrent Non-Brokered Private Placement**
Concurrent with its previously announced upsized bought deal prospectus financing, Saturn intends to complete a Non-Brokered Private Placement of units (“**Units**”) by issuing an aggregate of 730,000 Units at a price of $3.00 per Unit for aggregate gross proceeds of $2,190,000. Each Unit will consist of one common share (a “**Share**”) and one common share purchase warrant of the Company (a “**Warrant**”). Each Warrant will be exercisable to acquire one Share for 36 months following the Closing Date, at an exercise price of $4.00, subject to adjustment in certain events. The Company will make reasonable efforts to list the Warrants on the TSX Venture Exchange (“**TSXV**”).

The Non-Brokered Private Placement will facilitate participation of strategic existing shareholders from Europe structurally unable to participate in the concurrent bought deal prospectus financing.

“The proceeds of current equity financings will allow for a much-expanded capital expenditure budget for 2022 and allow the company to accelerate its production growth in the current high oil price environment,” stated John Jeffrey, CEO of Saturn. “We expect that the incremental growth in the Company’s cash flow will far exceed the dilution of the financings and will be to the long-term benefit of all shareholders.”

Saturn intends to provide a corporate update as well as its 2022 capital expenditure budget and related financial guidance after the closing of the previously announced upsized bought deal prospectus financing expected on or about March 10, 2022.

The Company intends to use the net proceeds of the Non-Brokered Private Placement to expand capital expenditures, for working capital and general corporate purposes. Closing of the Non-Brokered Private Placement is expected to occur on or about March 10, 2022, or such other date as the Company may choose (the “**Closing Date**”) and is subject to customary closing conditions, including, the approval of the TSXV. The Non-Brokered Private Placement will take place by way of a private placement pursuant to applicable exemptions from the prospectus requirements in those jurisdictions where the Non-Brokered Private Placement can lawfully be made, including the United States under private placement exemptions. The Shares and Warrants shares issued pursuant to the Non-Brokered Private Placement will have a hold period of four months and one day from the Closing Date in accordance with applicable securities laws.

**About Saturn Oil & Gas Inc.**
Saturn Oil & Gas Inc. is a growing Canadian energy company focused on generating positive shareholder returns through the continued responsible development of high-quality, light oil weighted assets, supported by an acquisition strategy that targets highly accretive, complementary opportunities. Saturn has assembled an attractive portfolio of free-cash flowing, low-decline operated assets in Southeastern Saskatchewan and West Central Saskatchewan that provide a deep inventory of long-term economic drilling opportunities across multiple zones. With an unwavering commitment to building an ESG-focused culture, Saturn’s goal is to increase reserves, production and cash flows at an attractive return on invested capital. Saturn’s shares are listed for trading on the TSX.V under ticker ‘SOIL’ and on the Frankfurt Stock Exchange under symbol ‘SMKA’.

Further information and a corporate presentation is available on Saturn’s website at

**Saturn Oil & Gas Investor & Media Contacts:**
John Jeffrey, MBA – Chief Executive Officer
Tel: +1 (587) 392-7902

Kevin Smith, MBA – VP Corporate Development
Tel: +1 (587) 392-7900

**Reader Advisory**
This news release includes non-GAAP measures as further described herein. These non-GAAP measures do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable with the calculation of similar measures by other companies and should not be used to make such comparisons. Management believes that the presentation of these non-GAAP measures provides useful information to investors and shareholders as the measures provide increased transparency and the ability to better analyze performance against prior periods on a comparable basis.
“Netback” and “Operating netback per bbl” are determined by deducting royalties, operating expenses and transportation expenses from petroleum and natural gas sales. Operating netbacks are per boe measures used in operational and capital allocation decisions. Presenting operating netbacks on a per boe basis allows management to better analyze performance against prior periods on a comparable basis.
“Recycle Ratio” is an estimate of the amount of undiscounted cash flow from production that is expected to be generated relative to the amount of capital required to put that unit of future production into production. It is calculated by dividing the Netback of production by the development or acquisition cost of that production and represents the amount of future cash flow that is expected to be produced from each dollar of capital investment, undiscounted.

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project”, “scheduled”, “will” or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, (i) estimated 2022 operating netback for the assets acquired pursuant to the Strategic Acquisition; (ii), completion of the Non-Brokered Private Placement, including TSXV approval; (iii) listing of the Warrants, (iv) the use of proceeds from the Non-Brokered Private Placement, and (v) incremental growth in the Company’s cash flow.

The forward-looking statements contained in this press release are based on certain key expectations and assumptions made by Saturn, including expectations and assumptions concerning: the timing of and success of future drilling, development and completion activities, the performance of existing wells, the performance of new wells, the availability and performance of facilities and pipelines, the geological characteristics of Saturn’s properties, the application of regulatory and licensing requirements, the availability of capital, labour and services, the creditworthiness of industry partners and the ability to source and complete further asset acquisitions.

Although Saturn believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Saturn can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), constraint in the availability of services, commodity price and exchange rate fluctuations, the current COVID-19 pandemic, actions of OPEC and OPEC+ members, changes in legislation impacting the oil and gas industry, adverse weather or break-up conditions and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. These and other risks are set out in more detail in Saturn’s Annual Information Form for the year ended December 31, 2020.

Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although Saturn believes that the expectations reflected in its forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because Saturn can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, the timely receipt of any required regulatory approvals and the satisfaction of all conditions to the completion of the Non-Brokered Private Placement. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

The forward-looking information contained in this press release is made as of the date hereof and Saturn undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Boe means barrel of oil equivalent. All boe conversions in this news release are derived by converting gas to oil at the ratio of six thousand cubic feet (“Mcf”) of natural gas to one barrel (“Bbl”) of oil. Boe may be misleading, particularly if used in isolation. A Boe conversion rate of 1 Bbl : 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio of oil compared to natural gas based on currently prevailing prices is significantly different than the energy equivalency ratio of 1 Bbl : 6 Mcf, utilizing a conversion ratio of 1 Bbl : 6 Mcf may be misleading as an indication of value.

Saturn uses the following abbreviations and frequently recurring terms in this press release: “WTI” refers to West Texas Intermediate, a grade of light sweet crude oil used as benchmark pricing in the United States and “Mcf” refers to thousand cubic feet.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

All dollar figures included herein are presented in Canadian dollars, unless otherwise noted.