Unconventional Oil

[johnlw]

Petrobank arranges $250-million (U.S.) debt offering

2007-04-20 06:37 ET - News Release

Mr. John Wright reports

PETROBANK ANNOUNCES LAUNCH OF CONVERTIBLE DEBT OFFERING

Petrobank Energy & Resources Ltd. intends to make an offering of up to $250-million (U.S.) in principal amount of convertible notes due 2012. The amount of the offering includes an option in respect of up to $50-million (U.S.) in principal amount of notes that Petrobank has granted to ABG Sundal Collier Norge ASA (ABG). The offering is being conducted outside of Canada through a syndicate led by ABG, and including Haywood Securities Inc. and TD Securities Inc.

The proceeds of the offering will be used for general corporate purposes, including but not limited to, expenditures on the company's Whitesands heavy oil project and an acceleration of the company's recently expanded Bakken light oil resource play in southeast Saskatchewan. A portion of the proceeds of the offering may also be used to increase the company's ownership interest in its Whitesands Insitu Ltd. 84-per-cent-owned subsidiary.

The notes are convertible into common shares of Petrobank and are expected to have an annual coupon in the range of 2.25 per cent to 3.0 per cent and a conversion premium of 40 per cent based on the volume weighted average common share price of the company on the Toronto Stock Exchange, determined on April 20, 2007. The company will have an option to call the notes after three years, should the price of the company's common shares exceed 120 per cent of the prevailing conversion price of the notes.

The notes will be issued at 100 per cent of their principal amount and, unless previously redeemed, converted or cancelled, will mature in 2012. The notes are expected to be issued on or about May 4, 2007.

The notes will be offered solely to investors outside of Canada on a private placement basis. ABG is acting as sole bookrunner for the offering. The offering is subject to certain approvals, including the approval of the Toronto Stock Exchange.

In connection with the offering, the company has amended its shareholders rights plan such that the benefits of the plan are available to holders of convertible securities, including holders of the notes. The amended shareholders rights plan will be made available on SEDAR (see Stockwatch SEDAR files).

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