CARDINAL ENERGY LTD. ANNOUNCES $86.5 MILLION BOUGHT DEAL OFFERING OF COMMON SHARES, OFFICIAL SANCTIONING OF REFORD 2, AND UPDATED 2026 GUIDANCE
Executive Summary
- Cardinal Energy entered a bought‑deal equity financing for up to 10 million common shares at $8.65 per share, targeting gross proceeds of $86.5 M (potentially $95.15 M if the over‑allotment is exercised).
- The net proceeds will be used to repay senior debt, fund the final investment decision and construction of the Reford 2 SAGD oil project, and support general corporate purposes, increasing 2026 capital expenditures by ~$85 M.
- Reford 2 is sanctioned as a 4,250 bbl/d (expandable to 6,500 bbl/d) SAGD development with an estimated base capital cost of $140 M; construction is expected to start now, with first steam in summer 2027 and name‑plate production by early Q4 2027.
Key Details
- Offering Structure:
- 10,000,000 common shares at $8.65 per share → gross proceeds $86,500,000.
- Over‑allotment option for up to an additional 1,000,000 shares at the same price; full exercise would raise total gross proceeds to ≈$95.15 M.
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Offering expected to close on or about February 4, 2026.
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Underwriters: Joint‑bookrunners RBC Capital Markets and CIBC Capital Markets (co‑lead syndicate).
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Dividend Timing Note: Closing after the January 30, 2026 record date means purchasers will not receive the February 17, 2026 monthly dividend.
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Use of Proceeds:
- Repayment/reduction of existing senior credit facility.
- Advance development and construction of Reford 2 SAGD project.
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General corporate purposes.
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Reford 2 Project Details:
- Location: ~10 km north of Reford 1 SAGD asset.
- Initial capacity: 4,250 bbl/d (heavy oil) with optional expansion to 6,500 bbl/d for an additional ~$40 M.
- Estimated base capital cost: $140 M (plus taxes).
- Construction phase ≈18 months; first steam expected summer 2027; ramp‑up to name‑plate by early Q4 2027.
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Project life forecast ~20 years; payout estimated at ~2 years at $60/bbl WTI when operating at 4,250 bbl/d.
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2026 Budget Update:
- Capital expenditures increased by ~$85 M (from original $75 M to a total of $160 M).
- Net debt expected to remain flat relative to end‑2025 levels at current strip pricing.
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Corporate production guidance unchanged: 25,000–25,500 boe/d for 2026; Reford 2 contributions not until early Q4 2027.
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Production Context – Reford 1:
- Forecast to produce 6,500 bbl/d (100% heavy oil) in Q1 2026, 8 % above name‑plate capacity.
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Recent steam‑oil ratios (SOR) < 2.5×, comparable to leading SAGD assets.
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Regulatory & Distribution:
- Shares to be distributed across Canada (excluding Quebec) via prospectus supplement to the March 28 2024 base shelf prospectus; U.S. private placement to qualified institutional buyers under Rule 144A.
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Offering subject to customary regulatory approvals, including TSX listing requirements.
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Forward‑Looking Statements: The release contains extensive forward‑looking information regarding timing, costs, production forecasts, and financial impacts of the financing and Reford 2 project.
Notable Quotes
(No direct CEO/President quotes were included in the release.)