LONGREACH OIL AND GAS LIMITED NOTIFIES CONTRACTOR TO MOBILIZE RIG FOR KAMAR WELL AT SIDI MOKTAR
AND ANNOUNCES PROPOSED INTERIM FINANCING
LONGREACH OIL AND GAS LIMITED (TSX-V: LOI) (the “Company” or “Longreach”) is pleased to announce that it has given notice to its contractor Saipem SpA to mobilize the Drillmec Mas 7000 rig to the Kamar well location for the purpose of drilling a second well as a follow up to its Koba-1 well at its operated Sidi Moktar onshore license area in Morocco.
The Company intends to complete an interim debenture financing of between Cdn$10 – Cdn$15 million with a number of qualified investors, the proceeds of which will be used for the ongoing development of the Kamar well and for general corporate purposes. It is expected that the debentures will bear interest at a rate of 10% per annum and will mature two years from closing and will otherwise have terms and conditions customary for transactions of this nature. It is expected that purchasers of debentures will also receive non transferable bonus warrants to purchase ordinary shares of the Company for two years from closing (subject to adjustment) with an exercise price of at least Cdn$0.30. Insiders may participate in the proposed debenture financing, subject to the availability of applicable related party transaction exemptions. The proposed financing remains subject to execution of definitive documentation and approval of the TSX Venture Exchange.
If the proposed financing is completed, the Company intends to repay the debentures with the proceeds of a subsequent public or private offering of equity securities, which may include a rights offering to all shareholders of the Company.