Second Wave Prices Private Placement, Debenture Financing

Second Wave Petroleum Ltd. reported that the Company is proceeding with its previously announced acquisition to acquire all of the issued and outstanding common shares of Milagro Energy Inc. and its $23 million financing to be completed in conjunction with the Transaction.

The Company announced that the equity portion of the financing will be completed by way of a private placement through the issuance of up to 40,000,000 Class A Shares of the Company issued at a price of $0.25 per share for aggregate gross proceeds of up to $10 million, which Brookfield Bridge Lending Fund Inc. has agreed to backstop.

In addition to the Private Placement, the Company will issue a new convertible junior secured debenture of $13 million principal amount to Brookfield which shall be at the floating prime interest rate and will be exercisable into Class A Shares of the Company at $0.3125 per share until two years from the closing date of the Transaction.

The Class A Shares to be issued pursuant to the Private Placement and on conversion of the Debenture are subject to a four month hold from the date of closing of the Transaction, subject to receipt of all necessary regulatory and stock exchange approvals. The Private Placement and Debenture will enable Second Wave to eliminate all of the estimated net debt of Milagro on the completion of the Transaction.

Second Wave also reported that the Company's Board of Directors has approved the granting of 2,250,000 stock options to the new members of the management team of the Company. The options will be issued with an exercise price of $0.26 per share and have a five year term with standard vesting provisions.


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