Horizon Petroleum arranges $3M debenture financing

Executive Summary

• Horizon Petroleum Ltd. announced a private placement of secured convertible debentures with an aggregate principal amount of up to $3 million.
• The proceeds are designated to fund the final payment for the acquisition of Polish subsidiaries (Bielska-Biala and Cieszyn concessions), cover long-lead items and civil works for the Lachowice 7 gas well re-entry, and provide working capital.
• The transaction involves insider participation and includes a concurrent amendment to the exercise price of existing warrants issued in May 2025.

Key Details

• Financing Structure: Private placement of secured convertible debentures.
• Principal Amount: Up to $3,000,000.
• Price: $1,000 per debenture.
• Security Status: Second position secured, subordinate to $720,000 of debentures issued on May 20, 2025 (due May 20, 2026).
• Interest Rate: 15% per annum.
• Term: 24 months following the closing date.
• Anticipated Closing Date: November 30, 2025.
• Conversion Terms:
  • Convertible into units at the holder's option prior to maturity.
  • Conversion Price: 10 cents per unit.
  • Each unit comprises one common share and one-half of one common share purchase warrant.
• Warrant Terms (New):
  • Exercisable to acquire one common share.
  • Exercise Price: 15 cents per share.
  • Expiration: 36 months from the debenture closing date.
• Use of Proceeds:
  • Final payment to San Leon Energy for the acquisition of 100% wholly owned Polish subsidiary companies holding the Bielska-Biala and Cieszyn concessions.
  • Long-lead items and civil works for the planned re-entry of the Lachowice 7 gas well.
  • Working capital for general corporate purposes in Poland and Canada.
• Related Party Transaction: Certain directors and officers are expected to participate. The offering is exempt from formal valuation and minority approval requirements under Multilateral Instrument 61-101 (MI 61-101) due to insider participation.
• Warrant Amendment:
  • The company intends to amend the exercise price of 3,775,000 warrants issued in connection with the May 2025 debentures.
  • Current Exercise Price: 20 cents per share.
  • Proposed New Exercise Price: 15 cents per share (to match the new offering).
  • Subject to TSX Venture Exchange approval.
• Fees: Finders' fees or commissions of up to 7% in cash and 7% in warrants may be paid.
• Regulatory Conditions: Closing is subject to TSX Venture Exchange approval and customary conditions. Securities are subject to a statutory four-month hold period.

Notable Quotes

• "This financing will allow Horizon to pay the final payment to San Leon Energy for the acquisition of our 100-per-cent wholly owned Polish subsidiary companies that hold the Bielska-Biala and Cieszyn concessions in southern Poland. Additionally, the proceeds will pay for the long-lead items and civil works for the planned re-entry of the Lachowice 7 gas well and provide working capital for general corporate purposes in Poland and in Canada." — David Winter, Chief Executive Officer