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CALGARY, Oct. 21, 2016 /CNW/ - DualEx Energy International
Inc. ("DualEx" or the "Company") (TSXV: DXE)
announced that, further to its news release dated September 30, 2016, it has closed the acquisition
of producing assets in the Peace River Arch area of northern
Alberta, closed the acquisition of
two private corporations and closed the non-brokered private
placement offering of 81,050,000 units at a price of $0.01 per unit for gross proceeds of $810,500.
Company President & CEO Ken
Tompson commented, "We exceeded the minimum sought under the
private placement, and the funds generated, combined with those
held in the private companies acquired, will provide DualEx with
the financial wherewithal to undertake optimization initiatives
planned for the Peace River arch asset acquisition and to lay the
groundwork for development activities going forward."
The Asset Acquisition
DualEx acquired producing oil and gas assets in the Peace River
Arch area of northwest Alberta
(the "Asset Acquisition") from a private company (the
"Vendor"). The consideration paid to the Vendor was
$285,000 cash, subject to
adjustments, and the issuance of two million non-interest bearing,
non-voting Series I Preferred Shares (the "Preferred
Shares"). Subject to restrictions on becoming an insider
of DualEx as a result of conversion of the Preferred Shares, the
Vendor may, at any time and at its option, convert all or part of
the Preferred Shares into units ("Asset Acquisition
Units") of DualEx. Each such Asset Acquisition Unit is
comprised of one (1) common share in the capital of DualEx (each a
"Common Share") and one-half (1/2) of a Common Share
purchase warrant (each whole such warrant, an "Asset
Acquisition Warrant"). The number of Asset
Acquisition Units issuable upon the conversion of the Preferred
Shares is equal to the number of Preferred Shares to be converted
multiplied by $1.00 and divided by
the volume weighted average of the trading price of the Common
Shares on the TSX Venture Exchange (the "TSXV") during the
immediately prior twenty (20) consecutive day period prior to
conversion (the "Market Price"). Each whole Asset
Acquisition Warrant entitles the holder to purchase one (1) Common
Share during the period expiring on the five year anniversary of
the closing date of the Asset Acquisition upon payment of the Asset
Acquisition Warrant exercise price which is equal to the Market
Price, subject to TSXV minimum pricing rules.
The Private Company Acquisitions
Concurrent with the completion of the Asset Acquisition, DualEx
purchased two private oil and gas companies for the collective
consideration of $550,000 paid by the
issuance of 55,000,000 units of DualEx (each a "Private
Company Acquisition Unit") at a deemed value of
$0.01 per Private Company Acquisition
Unit (collectively, the "Private Company
Acquisitions"). Each Private Company Acquisition Unit
consists of one (1) Common Share and one-half (1/2) of a Common
Share purchase warrant (each such whole warrant, a "Private
Company Acquisition Warrant"). Each whole Private
Company Acquisition Warrant is convertible into one (1) Common
Share at the exercise price of $0.015
per Common Share, for a period of two years from the closing
date.
The Private Placement Offering
In conjunction with the completion of the Asset Acquisition and
the Private Company Acquisitions discussed above, DualEx completed
a non-brokered private placement of 81,050,000 units (each an
"Offering Unit") at a price of $0.01 per Offering Unit for gross proceeds of
$810,500 (the
"Offering"). Each Offering Unit consists of one (1)
Common Share and one-half of a (1/2) Common Share purchase warrant
(each such whole warrant, an "Offering Warrant"). Each
whole Offering Warrant is exercisable into one (1) Common Share at
a price of $0.015 per Common Share
for a period of two years from the issuance of such Offering
Warrant. The proceeds of the Offering will be used for
working capital and general corporate purposes. The Common
Shares and Offering Warrants issued in connection with the Offering
are subject to a hold period that expires on February 21, 2017.
The Consolidation and Annual General and Special
Meeting
DualEx also announces that its 2016 Annual General and Special
Meeting of Shareholders will be held in Calgary on December 15,
2016 (the "Meeting"). At the Meeting,
shareholders will be asked to approve, among other things, the
consolidation (the "Consolidation") of DualEx's Common
Shares on the basis of one post-consolidation Common Share for
every 10 pre-consolidation Common Shares (as was announced in its
September 30, 2016 news
release). Details of the Meeting will be contained in
materials mailed out to shareholders of record as at November 10, 2016.
After the completion of the Private Company Acquisitions and the
Offering announced above, DualEx has 250,088,939 Common Shares
issued and outstanding. After the completion of the
Consolidation, and assuming no Preferred Shares are converted and
no warrants are exercised, it is anticipated that DualEx will have,
on a post-Consolidation basis, approximately 25,008,893 Common
Shares issued and outstanding.
Unless otherwise stated, all Common Share, unit, warrant and
other securities figures in this news release are pre-Consolidation
figures.
Management Changes
As was first announced in the September
30, 2016 news release, Mr. Jason
Schoenfeld, P.Eng, was appointed Vice President, Engineering
of DualEx effective October 20. Mr. Schoenfeld is a
professional engineer with twenty years of diverse operations
experience in the western Canadian oil and gas industry.
Other Information
The Private Company Acquisitions are considered "related party
transactions" under Multilateral Instrument 61-101 – Protection
of Minority Security Holders in Special Transactions ("MI
61-101") and TSXV Policy 5.9 as approximately 20% of the shares
of both private companies were held or controlled, directly or
indirectly, by a director of the Company. In addition,
directors or officers of the Company purchased 2,500,000 Offering
Units and such purchases are considered "related party
transactions" under MI 61-101 and TSXV Policy 5.9. The
Company is relying on exemptions from the formal valuation and
minority approval requirements of MI 61-101 and TSXV Policy 5.9, in
respect of these acquisitions and share purchases, pursuant to
Section 5.5(b) (Issuer Not Listed on Specified Markets) and Section
5.7(a) (Fair Market Value Not More Than 25% of Market
Capitalization) of MI 61-101, respectively.
No new insiders were created, nor did any change of control
occur, as a result of the above transactions.
About DualEx Energy International Inc.
DualEx Energy International Inc. is an oil and gas exploration
and production company with operations in Western Canada.
DualEx's Common Shares trade on the TSXV under the symbol
"DXE".
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 release.
Forward-Looking Information: This news release contains
"forward-looking information" within the meaning of applicable
Canadian securities legislation. All statements, other than
statements of historical fact, included herein are forward-looking
information. In particular, this news release contains
forward-looking information in relation to: the use of proceeds for
the Offering; the timing for the Meeting; and the
Consolidation. This forward-looking information reflects
DualEx's current beliefs and is based on information currently
available to DualEx and on assumptions DualEx believes are
reasonable. These assumptions include, but are not limited
to: DualEx shareholder approval of the Consolidation; market
acceptance of the transactions announced in this new release; the
amount and extent of future abandonment liabilities in the assets
being acquired pursuant to the Private Company Acquisitions; the
accuracy of reserve reports in relation to the Asset Acquisition;
equipment and crew availability for any work that may be conducted
in relation to the assets acquired pursuant to the Asset
Acquisition or the Private Company Acquisitions; and DualEx's
financial capability. Forward looking information is subject
to known and unknown risks, uncertainties and other factors that
may cause the actual results, level of activity, performance or
achievements of DualEx to be materially different from those
expressed or implied by such forward-looking information.
Such risks and other factors may include, but are not limited to:
reservoir performance, labour, equipment and material costs;
interest and currency exchange rates; general business, economic,
competitive, political and social uncertainties; general capital
market conditions and market prices for securities; delay or
failure to receive board, shareholder or regulatory approvals; the
actual results of future operations; competition; changes in
legislation, including environmental legislation, affecting DualEx;
the timing and availability of external financing on acceptable
terms; and lack of qualified, skilled labour or loss of key
individuals. A description of additional assumptions used to
develop such forward-looking information and a description of
additional risk factors that may cause actual results to differ
materially from forward-looking information can be found in
DualEx's disclosure documents on the SEDAR website at
www.sedar.com. Although DualEx has attempted to identify
important factors that could cause actual results to differ
materially from those contained in forward-looking information,
there may be other factors that cause results not to be as
anticipated, estimated or intended. Readers are cautioned
that the foregoing list of factors is not exhaustive. Readers
are further cautioned not to place undue reliance on
forward-looking information as there can be no assurance that the
plans, intentions or expectations upon which they are placed will
occur. Forward-looking information contained in this news
release is expressly qualified by this cautionary statement.
The forward-looking information contained in this news release
represents the expectations of DualEx as of the date of this news
release and, accordingly, is subject to change after such
date. However, DualEx expressly disclaims any intention or
obligation to update or revise any forward-looking information,
whether as a result of new information, future events or otherwise,
except as expressly required by applicable securities law.
SOURCE DualEx Energy International Inc.