CALGARY, AB, Sept. 27, 2021 /CNW/ - Cenovus Energy Inc. (TSX:
CVE) (NYSE: CVE) ("Cenovus" or the "Selling Shareholder") and
Headwater Exploration Inc. (TSX: HWX) ("Headwater" or the
"Company") announced today that they have entered into an agreement
with Peters & Co. Limited and BMO Capital Markets (the "Lead
Underwriters"), on behalf of a syndicate of underwriters (together
with the Lead Underwriters, the "Underwriters"), pursuant to which
the Underwriters have agreed to purchase, on a bought deal basis,
from Cenovus, through its wholly owned subsidiary, Cenovus Marten
Hills Partnership (the "Partnership"), 25,000,000 common shares of
the Company (the "Common Shares") at a price of $4.55 per Common Share (the "Offering Price") for
total gross proceeds to the Selling Shareholder of $113,750,000 (the "Offering"). The Selling
Shareholder has granted the Underwriters an option to purchase an
additional 15% of the Common Shares issued under the Offering
(3,750,000 Common Shares) at the Offering Price exercisable to
cover over-allotments and for market stabilization purposes in
whole or in part at any time until 30 days after the closing. The
Company will not receive any of the proceeds from the Offering or
the over-allotment option, if exercised.
Cenovus currently holds, indirectly through the Partnership,
50,000,000 Common Shares, representing approximately 24.7% of the
issued and outstanding Common Shares and 15,000,000 purchase
warrants exercisable at $2.00 per
Common Share until December 2, 2023.
Following the closing of the Offering, Cenovus will indirectly hold
25,000,000 Common Shares (21,250,000 Common Shares assuming full
exercise of the over-allotment option), representing approximately
12.3% of the issued and outstanding Common Shares (10.5% assuming
full exercise of the over-allotment option) and 15,000,000 warrants
to purchase Common Shares. Assuming exercise of the warrants held
by Cenovus, following closing of the Offering, Cenovus would
indirectly hold 40,000,000 Common Shares (36,250,000 Common Shares
assuming full exercise of the over-allotment option), representing
approximately 18.4% of the issued and outstanding Common Shares
(16.7% assuming full exercise of the over-allotment option).
Cenovus is selling the Common Shares as part of its plan to
reduce net debt levels towards its $10
billion interim target and accelerate shareholder returns.
Through its active development plan and early success, Headwater
has accelerated the value generated from the Marten Hills asset and
continues to progress its exploration program. The Offering will
expand Headwater's free-trading float and is expected to provide
new and existing shareholders with enhanced trading liquidity.
The Common Shares will be offered by way of a short form
prospectus qualifying them for distribution in all provinces of
Canada, excluding Quebec. Private placement offerings in
the United States will be made to
"qualified institutional buyers" pursuant to Rule 144A of the
United States Securities Act of 1933 and with certain accredited
institutional investors under Regulation D. The Offering is
expected to close on or about October 14,
2021 and is subject to certain conditions including, but not
limited to, the receipt of all necessary corporate and regulatory
approvals, including the applicable securities regulatory
authorities. No securities regulatory authority has either approved
or disapproved of the contents of this news release.
The securities being offered have not been, nor will they be,
registered under the United States Securities Act of 1933, as
amended, and may not be offered or sold in the United States or to, or for the account or
benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy nor shall there be any sale of the securities in any
State in which such offer, solicitation or sale would be
unlawful.
Advisory
Basis of Presentation
Cenovus reports financial
results in Canadian dollars and presents production volumes on a
net to Cenovus before royalties basis, unless otherwise stated.
Cenovus prepares its financial statements in accordance with
International Financial Reporting Standards (IFRS).
Forward-looking Information
This news release contains
certain forward-looking statements and forward-looking information
(collectively referred to as "forward-looking information") within
the meaning of applicable securities legislation, including the
United States Private Securities Litigation Reform Act of 1995,
about Cenovus's and Headwater's current expectations, estimates and
projections about the future, based on certain assumptions made by
Cenovus and Headwater in light of their respective experience and
perception of historical trends. Although Cenovus and Headwater
believe that the expectations represented by such forward-looking
information are reasonable, there can be no assurance that such
expectations will prove to be correct. Readers are cautioned not to
place undue reliance on forward-looking information as actual
results may differ materially from those expressed or implied.
Neither Cenovus nor Headwater undertake any obligation to update or
revise any forward-looking information except as required by
law.
This forward-looking information is identified by words such as
"achieve", "commitment", "continue", "position" and "will", or
similar expressions and includes suggestions of future outcomes,
and in respect to Cenovus includes statements about: the use of
sale proceeds to reduce debt and achieve the interim net debt
target of $10 billion; creating value
for shareholders; and positioning Cenovus's balance sheet to
increase shareholder returns. In respect to Headwater, the
forward-looking information includes statements about: the intent
to continue to progress its exploration program; and that the
Offering will expand Headwater's free-trading float and is expected
to provide new and existing shareholders with enhanced trading
liquidity.
Developing forward-looking information involves reliance on a
number of assumptions and consideration of certain risks and
uncertainties, some of which are specific to Cenovus or Headwater
and others that apply to the industry generally.
Additional information about risks, assumptions, uncertainties
and other factors that could cause Cenovus's actual results to
differ materially from those expressed or implied by its
forward-looking statements is contained under "Risk Management and
Risk Factors" in Cenovus's Annual Management's Discussion and
Analysis (MD&A) or Form 40-F for the year ended December 31, 2020 and in the updates in the "Risk
Management and Risk Factors" section of Cenovus's MD&A for the
period ended June 30, 2021.
Additional information about risks, assumptions, uncertainties and
other factors that could cause Headwater's actual results to differ
materially from those expressed or implied by its forward-looking
statements is contained under "Risk Factors" in its annual
information form for the year ended December
31, 2020, which is available on SEDAR at
https://www.sedar.com/.
Cenovus Energy Inc.
Cenovus Energy Inc. is an integrated energy company with oil and
natural gas production operations in Canada and the Asia
Pacific region, and upgrading, refining and marketing
operations in Canada and
the United States. The company is
focused on managing its assets in a safe, innovative and
cost-efficient manner, integrating environmental, social and
governance considerations into its business plans. Cenovus common
shares and warrants are listed on the Toronto and New
York stock exchanges, and the company's preferred shares are
listed on the Toronto Stock Exchange. For more information, visit
cenovus.com.
Find Cenovus on Facebook, Twitter, LinkedIn, YouTube and
Instagram.
Headwater Exploration Inc.
Headwater Exploration Inc. is a Canadian publicly traded
resource company engaged in the exploration for and development and
production of petroleum and natural gas in Canada. Headwater currently has high quality
oil production, reserves, and lands in the prolific Clearwater play in the Marten Hills area of
Alberta as well as low decline
natural gas production and reserves in the McCully Field near
Sussex, New Brunswick. Headwater
is focused on providing superior corporate level returns by
focusing on sustainability, asset quality and balance sheet
strength. Headwater common shares are listed on the Toronto Stock
Exchange. For more information, visit headwaterexp.com.
SOURCE Headwater Exploration Inc.
