TAG Oil closes $11.5-million offering

Executive Summary

• TAG Oil Ltd. has closed a brokered, best-effort offering of units at 10 cents per unit, raising aggregate gross proceeds of $11.5 million, including the full exercise of the over-allotment option.
• The capital raise is structured as two tranches: $5.64 million under the Listed Issuer Financing Exemption (LIFE) and $5.86 million via private placement.
• Proceeds are designated for appraisal and development activities at the BED-1 and SERQ concessions in Egypt, specifically targeting unconventional resource plays, alongside working capital.

Key Details

• Gross Proceeds: $11.5 million total.
• Offering Price: 10 cents per unit.
• Structure:
  • $5.64 million issued on a prospectus-exempt basis under the Listed Issuer Financing Exemption (LIFE).
  • $5.86 million issued under a private placement.
• Instrument Terms:
  • Each unit consists of one common share and one common share purchase warrant.
  • Warrants allow purchase of one common share at an exercise price of 13 cents.
  • Warrants expire on February 18, 2030.
• Use of Proceeds:
  • Advancing appraisal and development activities at the Badr oil field (BED-1) and southeastern Ras Qattara concessions (SERQ) in Egypt’s Western Desert.
  • Specific activities include drilling a new vertical delineation well at BED-1 targeting the Abu Roash F unconventional resource play.
  • Performing a diagnostic fracture injectivity test at SERQ to evaluate potential.
  • Drilling an additional well on the SERQ concession.
  • Working capital and general corporate purposes.
• Hold Periods:
  • LIFE units: No statutory hold period.
  • Private placement units: Hold period in Canada expires June 19, 2026.
• Insider Participation:
  • Insiders acquired an aggregate of 4.5 million units.
  • Classified as a related-party transaction under TSX-V Policy 5.9 and MI 61-101.
  • Exemptions from formal valuation and minority shareholder approval were relied upon as the fair market value did not exceed 25% of market capitalization.
• Agent Compensation:
  • Cash commission: $704,320.
  • Broker warrants: 7,043,200 warrants issued to agents, exercisable at 10 cents per unit until February 18, 2030.
  • Advisory fee: $98,500 plus tax, plus 985,000 advisory warrants (same terms as broker warrants).
  • Corporate finance advisory fee: 750,000 units.
• Regulatory Status: Subject to final approval of the TSX Venture Exchange.

Notable Quotes

• No direct quotes from management were included in the provided text.