EDMONTON, ALBERTA--(Marketwire - Dec. 11, 2012) -
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.
Cancen Oil Canada Inc. (the "Corporation") (TSX VENTURE:COI) is pleased to announce the appointment of a new management team with over 16 years of experience in the oilfield waste management industry and nearly 100 years in the oil and gas sector, two changes to the board of directors and a concurrent series of financings whereby:
- Effective in January 2013, a new management team comprised of: Brian Petersen as Chief Executive Officer, Ian Simister as President, Richard Lane as Chief Operating Officer and Jim Coughlan as Senior Vice President Sales and Business Development (the "New Management Team"), will be appointed;
- Brian Petersen and Ian Simister have been added to the board of directors of the Corporation effective immediately;
- The Corporation will complete a non-brokered private placement of units and common shares of the Corporation to the New Management Team and directors as well as to certain additional subscribers for proceeds of up to $3.0 million; and
- Stonecap Securities Inc. ("Stonecap") is acting as lead agent, along with Wolverton Securities Ltd. as co-agent and Macquarie Private Wealth Inc. as a special selling group member, in a brokered private placement offering for up to $5.0 million of 10% convertible unsecured, subordinated, debentures ("Debentures") of the Corporation (collectively, with the non-brokered financing, the "Private Placements").
It is anticipated that the Private Placements will close on or before December 31, 2012. The Corporation will seek approval for a change of the Corporation's name at the next annual meeting of shareholders of the Corporation.
Upon completion of the Private Placements, the New Management Team intends to focus on cash flow growth through optimizing and maximizing fluid handling capabilities at each of the Corporation's facilities by leveraging management's operational expertise and establishing the Corporation's brand in core operating areas. In addition, the New Management Team has identified a number of higher value waste water streams which can be handled through the Corporation's existing facilities with minor upgrades. The New Management Team will place a high priority on positioning the Corporation as a top tier fluid handling company in underserved, oil weighted geographic areas where it can utilize its experience and knowledge in waste water disposal, custom oil treating, oil blending and terminalling.
The New Management Team will continue to build on the Company's strategic relationship with Transcor Astra ("Astra") and fulfilling its contractual commitments.
The New Management Team
The New Management Team has a successful track record in financing, constructing and operating specialized custom oil treating, waste water disposal, oil blending and terminalling facilities servicing the upstream oil and natural gas companies operating in the Western Canadian Sedimentary Basin and the United States.
Chief Executive Officer & Director
|Brian Petersen has over 23 years of oil and gas investment banking experience in Canada, the United States and internationally and has previous experience as a director of both publicly listed and private companies. Mr. Petersen joins the Corporation from Stonecap Securities where he was a Managing Director and Head of Investment Banking, Western Canada. He spent the first 16 years of his career with RBC Capital Markets in Toronto, Calgary and Houston, Texas. He has worked in boutique investments banks for the past six years working with public and private companies in the energy services and oil & gas sectors. Mr. Petersen earned a Bachelor of Commerce degree from the University of British Columbia, and is a CFA Charterholder.
President & Director
|Ian Simister has 35 years of experience in the energy service industry with major multi-national corporations. Most recently, Mr. Simister served as President of Tervita Waste Processing (formerly CCS Midstream Services) where he was in charge of growth in the division both organically and through acquisitions. Prior to joining Tervita, Mr. Simister held various executive roles in energy service companies and prior thereto he held progressive roles at Halliburton and Baker Hughes, both domestically and internationally, over a span of 27 years.
Chief Operating Officer
|Richard Lane is a professional engineer with over 25 years of experience in operational leadership and business process development positions. Prior to joining the Corporation, Mr. Lane spent five years with Tervita as Vice President, Waste Processing. His past roles include Director of Quality and Business Process Improvements for Global Operations at Nortel Networks, Vice President, Operations at Circa Enterprises and Vice President of Operations with Global Thermoelectric. Mr. Lane holds a Bachelor of Applied Science degree from the University of Toronto as well as a MBA from Queens University.
Senior Vice President Sales and Business Development
|Jim Coughlan has 30 years of experience as an executive leader with demonstrated excellence in providing leadership and direction in operations, budget targets and development of new and existing business opportunities. Recently, Mr. Coughlan was Director of Sales and Marketing at Tervita Waste Processing where he spent nine years. Prior to joining Tervita, he was United States Western Regional Manager for Badger Daylighting. Past positions include Director for Leaser Operations for EOTT Energy Ltd. and Western Canada Operations Manager for Husky Oil. Mr. Coughlan holds a Bachelor of Commerce degree from the University of Alberta.
The Corporation has agreed to issue 4.6 million stock options in aggregate ("Options") to the members of the New Management Team and a director with an exercise price of $0.50 and an expiry date of five years from the date of grant.
The Private Placements
As part of the non-brokered private placement offering, the New Management Team and other key individuals will subscribe for up to 3.9 million units ("Units") of the Corporation at a price of $0.38 per Unit. In addition, up to 3.9 million common shares of the Corporation ("Common Shares") will be issued to certain additional subscribers identified by the New Management Team at a price of $0.38 per Common Share. The aggregate gross proceeds from the offering of the Units together with the Common Shares (collectively, the "Non-Brokered Private Placement") is expected to be $3.0 million. Each Unit is comprised of one (1) Common Share and one (1) share purchase warrant ("Warrant") of the Corporation. Each Warrant entitles the holder thereof to acquire one additional Common Share of the Corporation at a price of $0.50 for a period of five (5) years from closing of the Non-Brokered Private Placement.
The Debentures will have a face value of $1,000 per Debenture, a maturity date of January 31, 2017 (the "Maturity Date"), and will be convertible into Common Shares at the option of the holder at a conversion price, subject to certain adjustments, of $0.70 per Common Share (the "Conversion Price"), being a conversion rate of 1,428.57 Common Shares for each $1,000 principle amount of Debentures. The Debentures will accrue interest at a rate of 10% per annum payable semi-annually in arrears on January 31, and July 31 of each year commencing July 31, 2013. The July 31, 2013 interest payment will represent accrued interest for the period from the closing date. The Debentures will not redeemable before January 31, 2016. On or after January 31, 2016 and prior to the Maturity Date, the Corporation may, at its option, subject to providing not more than 60 and not less than 30 days prior notice, redeem the Debentures, in whole or, from time to time, in part, at par plus accrued and unpaid interest provided that the volume weighted average trading price of the Common Shares on the TSX Venture Exchange ("TSX Venture") during the 20 consecutive trading days ending five trading days preceding the date on which the notice of redemption is given is not less than 125% of the Conversion Price. The Debentures are direct, unsecured obligations of the Corporation, subordinated to other indebtedness of the Corporation for borrowed money and ranking equally with all other unsecured subordinated indebtedness. Subject to specified conditions, the Corporation has the right to repay the outstanding principal amount of the Debentures, on maturity or redemption, through the issuance of Common Shares. The Corporation also has the option to satisfy its obligation to pay interest through the issuance and sale of additional Common Shares.
The net proceeds from the Private Placements will be used for working capital, to fund the optimization and maximization of fluid handling capacity at each of the Corporation's facilities, repayment of the promissory note owing to Astra and for general corporate purposes.
Mezzanine Credit Facility
As last updated in the Corporation's press release on August 30, 2012, the New Management Team will continue to have discussions with potential mezzanine lenders and anticipates that it will be successful in securing a mezzanine credit facility (a "Mezzanine Credit Facility") the proceeds of which will be used to finance the Corporation's ongoing capital expenditure program. It is anticipated that the Mezzanine Credit Facility will be on terms consistent with industry standards and having first security against the existing assets of the Corporation.
Completion of the appointment of the New Management Team and the Private Placements are subject to a number of conditions and approvals including, but not limited to, the approval of the TSX Venture.
Management and Director Resignations
Fred LaHaie, the current President and Chief Executive Officer of the Corporation has announced his retirement effective December 31, 2012. The Board of Directors wishes to thank Fred for his contribution to the Corporation and wishes him well in retirement.
Additionally, Bruce N. Moisey has tendered his resignation as a director of the Corporation effective immediately. The Board of Directors wishes to thank Bruce for his contribution to the Corporation and wishes him well in his new endeavours.
Cancen is an energy services company that focuses on providing specialized services to upstream oil and natural gas companies operating in the Western Canadian Sedimentary Basin. The services provided by Cancen assist these companies with the treatment and sale of crude oil and the handling of by-products associated with oil and natural gas development and production. The services provided by Cancen include crude oil emulsion treatment, oilfield waste processing, and disposal of produced and waste water.
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Corporation's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the securities issued pursuant to the Private Placements. Such statements and information reflect the current view of the Corporation with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Corporation undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
The Corporation cautions that the foregoing list of material factors is not exhaustive. When relying on Cancen's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Corporation has also assumed that material factors will not cause any forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
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.