Loon Energy Enters Private Placement Deal
Loon Energy (TSX: LEY) has entered into a bought-deal private placement financing agreement with a syndicate of underwriters led by Canaccord Capital Corporation and including Orion Securities Inc., Dundee Securities Corporation and Brant Securities Limited. The offering will consist of 15,789,478 common shares at $0.95 for gross proceeds of $15,000,000. Loon has granted the underwriters an over-allotment option for 5,263,158 common shares at $0.95 for additional gross proceeds of $5,000,000 in the event that 100% of the option is exercised. The offering is subject to normal regulatory approval and is expected to close on or about March 30, 2005.
The net proceeds received by the Loon from the offering of common shares will be used for the drilling of exploration and development wells and the shooting of 3-D seismic in Colombia, working capital and/or expanded capital expenditures.
Loon announced on February 18th that it had entered into an agreement to explore for and develop hydrocarbons in the Republic of Colombia. Under the terms of the agreement with Kappa Energy Colombia Limited S.A., a private company, Loon will expend a minimum of US$6 million on drilling and seismic and will earn a 49% interest in the Abanico Association Contract. The Abanico Association Contract area encompasses more than 310 square miles (approximately 200,000 acres) in the central Magdalena Valley area of central Colombia.
Loon is focused on developing international oil and gas projects in south-central Europe and in Colombia. The total number of common shares issued and outstanding as of the date hereof is 46,092,708.