Jupiter Announces US$77.5 Million Private Placement of Senior Secured Notes and New Credit Facility

CALGARY, Feb. 7, 2020 /CNW/ - Jupiter Resources Ltd. and its affiliates (collectively, "Jupiter" or the "Company") have entered into a new $225 million senior secured reserve-based revolving credit facility (the "New Credit Facility") with a syndicate of eight financial institutions. The new three-year facility will be used for general corporate purposes and is scheduled to mature on February 5, 2023.

In addition, the Company has privately placed (the "Private Placement") US$77.5 million of Second-Priority Senior Secured Cash/PIK Notes due February 5, 2024 (the "Notes") with its four largest shareholders, which together own approximately 93% of Jupiter's outstanding common shares. The Notes shall bear interest at a rate per annum equal to 13%, payable semi-annually as follows: (i) a rate equal to 10% per annum shall be payable entirely in cash; and (ii) a rate equal to 3% per annum shall be payable entirely in kind by increasing the principal amount of the Notes. The proceeds from the Private Placement will be used for repayment of a portion of Jupiter's current bank indebtedness and for general corporate purposes in support of the Company's business plan.  The Private Placement was made in reliance upon an exemption from the registration requirements of the U.S. Securities Act of 1933 (the "Securities Act") pursuant to Section 4(a)(2) thereof.

"I appreciate the continued support of our bank syndicate, as well as the confidence that our investors have shown in the quality of Jupiter's assets, the strength of my team and the opportunity that lies ahead," stated Simon Bregazzi, CEO of Jupiter.

"I'm proud of how Jupiter navigated volatile and, at times, distressed market conditions that have persisted in western Canada for several years. The Canadian energy industry has plenty of work to do to address the issues plaguing our natural gas sector, but it is vitally important that we rise to the challenge. We are in the early stages of a global energy transition and Canada is better positioned than any country in the world to play a meaningful and very constructive role in shaping the future of global energy supply and to ensure the world's energy needs are met in an environmentally responsible and socially conscientious way. We at Jupiter are committed to doing our part and excited to pursue the opportunities that lie ahead," added Simon.

2020 Guidance

Jupiter's Board of Directors has approved a 2020 capital program of $110 to $130 million that includes drilling 9 to 11 net wells focused on Jupiter's liquids-rich natural gas properties in Kakwa and Resthaven. Jupiter's 2020 corporate guidance document has been posted to the Company website.

Board of Directors

Effective January 23, 2020, Rakesh Wilson has resigned from Jupiter's Board of Directors. Mr. Wilson had been a director of Jupiter since inception in 2014. "On behalf of the Company and the Board of Directors, I would like to thank Rakesh for his contribution to and support of Jupiter. We wish him well in his future endeavors," stated Simon.

Jupiter welcomes Olivia Wassenaar to the company's Board of Directors effective immediately. Ms. Wassenaar is a Senior Partner at Apollo Private Equity and Co-Lead of Natural Resources.  She serves on the boards of several Apollo portfolio companies, including American Petroleum Partners, LifePoint Health, and Talos Energy (NYSE: TALO).  Prior to joining Apollo, Ms. Wassenaar was a Managing Director at Riverstone Holdings, where she was a member of the investment team for ten years. Previously, Ms. Wassenaar worked at Goldman Sachs in the Investment Banking Division focusing on natural resources and at The World Bank Group. She received her AB, magna cum laude, from Harvard College and an MBA from the University of Pennsylvania's Wharton School.

In addition, Wilson Handler, who has been a director of Jupiter since inception, has been appointed Chairman of the Board.

Additional Matters

TD Securities Inc. acted as financial advisor to Jupiter and as lead arranger and bookrunner of the New Credit Facility.

About Jupiter

Jupiter is an independent Calgary-based energy company with an operations office in Grande Cache, Alberta. The Company is focused on the acquisition, development and production of unconventional liquids-rich natural gas properties in the Western Canadian Sedimentary Basin. For more information visit: www.jupiterresources.com.

Securities Matters

The Notes have not been registered under the U.S. Securities Act of 1933 (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes have been offered only in a private placement to institutional accredited investors in reliance on Section 4(a)(2) under the Securities Act.  This press release shall not constitute an offer to sell or the solicitation of an offer to buy the Notes nor shall there be any sale of the Notes in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any state.  

Forward Looking Statements

Certain information set forth in this release contains forward-looking statements, which are provided to allow investors to better understand our business. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Jupiter's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management and services, stock market volatility, changes in environmental regulations, tax laws and royalties and the ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Jupiter's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements, or if any of them do so, what benefits that Jupiter will derive therefrom. Jupiter disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Jupiter Resources Ltd