Pacific Energy Resources Ltd. announced that further to its news release of December 19, 2007, the Corporation has revised its incentive warrant financing (the "Offering") pursuant to which it is offering to issue one share of common stock and one new incentive warrant (the "Incentive Warrants") for every existing Initial Warrant so as to extend the offering period to 4:00 p.m. (Pacific Time) on January 18, 2008 (the "Offering Closing Time"). The extension of the offering period is subject to stockholder approval as set out in more detail below, which approval has been obtained.
The "Initial Warrants" consist of all outstanding subscriber stock purchase warrants of the Corporation with expiration dates of November 15, 2009, November 30, 2009, December 28, 2009 and January 25, 2010, which Initial Warrants are exercisable at a price of CAD$1.70 per share. The Initial Warrants are not listed for trading on the TSX. There are currently 35,086,199 Initial Warrants outstanding.
The Incentive Warrants will be exercisable into shares of common stock of the Corporation at a price of CAD $2.50 per share and will expire on January 18, 2013. The Incentive Warrants will not be listed for trading on the TSX.If the Corporation completes a subsequent equity offering during the 18 months following the Offering Closing Time (the "Adjustment Period") at a subscription price below CAD$1.70, holders of an Initial Warrants exercised in the Offering will be entitled to receive a number of additional shares of common stock that, when added to the total number of shares already received upon exercise of an Initial Warrant in the Offering, will equal the number of shares that would have been issued in the Offering if the per share exercise price that had been paid in the Offering had instead been the lowest per share subscription price paid by subscribers in the subsequent equity offering.
If the Corporation completes a subsequent convertible debt offering during the Adjustment Period, where the conversion rate in the debt instrument is below CAD$1.70 per share, then holders of an Initial Warrant exercised in the Offering will be entitled to receive a number of additional shares of common stock that, when added to the total number of shares already received upon exercise of an Initial Warrant in the Offering, will equal the number of shares that would have been issued in the Offering if the per share exercise price that had been paid in the Offering had instead been the lowest per share conversion rate of the debt instruments issued to subscribers in the subsequent convertible debt offering.
The proceeds received from the exercise of the Initial Warrants pursuant to the Offering will be used to satisfy in part the Corporation's obligation to raise equity capital and pay down secured debt incurred in connection with the Corporation's acquisition of Alaska assets in August 2007. The Corporation considered a variety of alternative financing proposals in connection with this obligation, but with the current state of the debt and equity markets, has concluded that this Incentive Warrant program provides the quickest, least expensive and least dilutive (to existing stockholders) means for the Corporation to raise capital.
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