Westgate to launch warrant exercise incentive program

Executive Summary

• Westgate Energy Inc. intends to launch a warrant exercise incentive program for 16,241,267 outstanding warrants, subject to TSX Venture Exchange approval.
• The program offers holders who exercise warrants within a 30-day window an additional incentive warrant (1/2 warrant per original warrant exercised) to encourage early capital raising.
• Proceeds from the exercise are designated for predrilling costs for a potential spring drilling program, operating cost reductions at Beaverdam, and general working capital.

Key Details

• Warrant Exercise Incentive Program:
  • Eligible Warrants: 16,241,267 common share purchase warrants issued in a best-effort offering closed on April 2, 2025.
  • Original Terms: Exercisable for one common share at $0.24 per share until April 2, 2027.
  • Incentive Structure: Holders exercising during the 30-day incentive period receive one-half of an additional common share purchase warrant for each eligible warrant exercised.
  • Incentive Warrant Terms: Each whole incentive warrant entitles the holder to acquire one common share at an exercise price of $0.35 per share for 18 months from issuance.
  • Acceleration Clause: If the volume-weighted average price (VWAP) of common shares on the TSX-V equals or exceeds $0.45 for 10 consecutive trading days, the company may accelerate the expiry of incentive warrants by issuing a press release, with expiry occurring 30 calendar days from that notice.
  • Hold Period: Incentive warrants and resulting shares are subject to a statutory hold period of four months and one day.
  • Unexercised Warrants: Remain exercisable on original terms until April 2, 2027; no incentive warrants are issued for exercises after the incentive period.
• Financial Expectations:
  • Gross Proceeds: Up to approximately $3,897,900.
  • Shares Issued: Up to 16,241,267 warrant shares.
  • Incentive Warrants Issued: Up to 8,270,633 incentive warrants.
• Use of Proceeds: Financing predrilling costs for a potential spring drilling program, additional operating cost reduction activities at Beaverdam, and general working capital.
• Operational Update:
  • Current Production: Approximately 775 barrels of oil equivalent per day (boe/d), with wells cleaning up following recent workovers and pump replacements.
  • Production Forecast: Expected to increase to approximately 850 boe/d by month-end as wells stabilize.
  • Colony Formation Well: The most recently drilled Colony formation well from the November program achieved a new peak production rate, with a weekly average exceeding 180 barrels per day. Planning is underway for a spring drilling program focused on the Colony formation.
  • Tank Treating Facility: Commissioned and already improving oil capture and reducing operating costs. Capacity to service up to 25 additional wells.

Notable Quotes

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