Horizon Petroleum arranges $3M debenture financing

Executive Summary

• Horizon Petroleum Ltd. announced an additional private placement of secured convertible debentures with a maximum aggregate principal amount of $3 million.
• The proceeds are designated for civil works for the re-entry of the Lachowice 7 gas well, working capital for operations in Poland and Canada, and repayment of existing liabilities.
• The debentures carry a 7% annual interest rate, are secured, and offer conversion rights into common shares and warrants at specified prices.

Key Details

• Transaction Structure: Private placement of secured convertible debentures.
• Principal Amount: Up to $3,000,000.
• Price: $1,000 per debenture.
• Interest Rate: 7% per annum, paid semi-annually in arrears in cash or shares (at company's option).
• Maturity/Term: Interest accrues from issuance date for 24 months following the closing date.
• Security/Ranking: Secured; ranks in fourth position on default behind existing debentures due May 20, 2026; Dec. 19, 2027; Dec. 29, 2027; Feb. 27, 2028; and March 25, 2028.
• Conversion Rights: Holders may convert $1,000 principal into:
  • 9,524 common shares (implied price of 10.5 cents per share).
  • 4,762 common share purchase warrants.
• Warrant Terms: Exercisable for one common share at an exercise price of 15 cents; exercisable until 36 months from closing.
• Use of Proceeds: Civil works for Lachowice 7 gas well re-entry, general corporate working capital (Poland/Canada), and repayment of existing liabilities.
• Insider Participation: Certain directors and officers are expected to participate, constituting a related-party transaction under MI 61-101. Exempt from formal valuation and minority approval requirements due to insider participation.
• Regulatory Approval: Subject to TSX Venture Exchange approval.
• Finder’s Fees: Up to 7% in cash and 7% in warrants.
• Hold Period: Four-month statutory hold period on all securities issued.
• Closing Date: Anticipated on or before April 15, 2026.

Notable Quotes

• "We are offering an additional convertible debenture financing given continued investor interest in the company's European gas strategy and the exciting gas development program at Lachowice in southern Poland." — Dr. David Winter, CEO