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Information Releases

December 1, 2015

Laricina Energy Ltd. Closes Settlement with CPP Credit and Provides Corporate Update

Laricina Energy Ltd. (“Laricina” or the “Company”) announces it has completed the settlement transaction (the “Settlement Transaction”) on November 30, 2015 agreed to in the settlement agreement entered into July 20, 2015 (the “Settlement Agreement”) with CPPIB Credit Investments Inc. (“CPP Credit”) to settle the secured debt obligations owing to CPP Credit of $118.5 million, including costs and expenses of CPP Credit (the “Notes”).

The Settlement Transaction was completed on substantially the same terms as previously disclosed in Laricina’s information release dated August 7, 2015, with the principal terms as follows:

  • In addition to prior payments to CPP Credit, Laricina paid $13.7 million to CPP Credit at closing as a further repayment of principal outstanding under the Notes from cash on hand;
  • The exempt pro rata private placement offering of common shares to shareholders was closed at the same time as the Settlement Transaction and the proceeds therefrom of $0.7 million were paid to CPP Credit;
  • $60.0 million of the Notes were converted to preferred shares at a price of $0.12 per preferred share which were then immediately converted into common shares resulting in 500.0 million common shares issued to CPP Credit, such conversion amount being capped to ensure CPP Credit and any of its affiliates do not exceed 89.0% of Laricina’s fully diluted shares outstanding upon completion of the Settlement Transaction;
  • $44.1 million remaining amount of Notes will continue to be outstanding and will be governed by the original note indenture dated March 20, 2014 as amended by a supplemental indenture entered into at closing which will simplify covenants and eliminate certain financial maintenance covenants. The remaining Notes will bear interest at 13.5% per annum accruing quarterly with interest payable-in-kind and shall be added to the principal amount of the Notes, and are repayable at maturity on March 20, 2018;
  • 28.8 million consent fee warrants were issued to CPP Credit at an exercise price of $0.25 per warrant which warrants will expire on March 20, 2018. For each warrant exercised, CPP Credit will receive one common share. The 3.75 million warrants held by CPP Credit which were issued at the time the original Notes were issued have been surrendered and cancelled as part of the Settlement Transaction; and
  • Under the terms of the Settlement Agreement CPP Credit has released Laricina from any obligation to pay the $9.74 million acceleration payment amount claimed in connection with any prior defaults by Laricina under the Notes.

Following the closing of the Settlement Transaction Laricina’s basic and fully diluted shares outstanding are 576,082,228 and 606,161,054, respectively, as at November 30, 2015.

CPP Credit and affiliates hold approximately 88.6% of the basic shares outstanding and 89.0% on a fully diluted basis.

Laricina also advises that it has obtained a further order from the Court of Queen’s Bench of Alberta, Judicial Centre of Calgary (the “Court”) that extends creditor protection and the stay of proceeding against the Company and its subsidiaries under the previously announced Companies’ Creditors Arrangement Act (Canada) (“CCAA”) until and including December 19, 2015. The Company has been operating under the protection of the CCAA since March 26, 2015.

Laricina plans to satisfy in full all proven and undisputed amounts owing to unsecured creditors and expects thereafter to apply to the Court for termination of its CCAA proceedings before year-end and, to the extent that any proceedings regarding claims by or against Laricina are ongoing, they will continue on timetables set by the Court until they are concluded.

Pursuant to the terms of the Settlement Agreement, as amended, Laricina entered into a board participation agreement at closing pursuant to which, upon Laricina exiting from CCAA protection or at such time as Laricina and CPP Credit may earlier agree, the Laricina board of directors shall consist of five directors, to which CPP Credit has the right to select three representatives as it holds more than 50.0% of the Laricina basic common shares outstanding. The current board of directors will continue until such time.

The Company’s estimated cash and cash equivalents as of November 30, 2015 after giving effect to the completion of the Settlement Transaction and related payments, is approximately $46.3 million.

Under the terms of the Settlement Agreement the net proceeds of certain anticipated receivables (estimated at $14.4 million) when they are received will be applied against the remaining outstanding Notes.

Subject to any revisions to the ongoing business plan by the new board of directors once it is in place, Laricina is proceeding with very limited operations under a revised scaled-back business plan with a view to maximizing long term value for its shareholders.

About Laricina Energy Ltd.
Laricina is a non-public, Calgary based, responsible energy company that will contribute supply to the growing demand for crude oil through in situ oil sands development.

Laricina’s goal is to create value by developing Canada’s oil sands using innovative in situ technologies. The Company has a diverse portfolio of oil sands assets at varied stages of development. Our current focus is on the Company’s two core projects – Saleski and Germain. Laricina’s asset base, holds 0.5 billion barrels of probable reserves, 3.9 billion barrels of contingent resources (best estimate) and 0.2 billion barrels of prospective resources (best estimate) as determined by Laricina’s independent reservoir engineers as at December 31, 2014 for Germain Grand Rapids, Germain Winterburn, Saleski Grosmont, Burnt Lakes, Conn Creek, Poplar Creek and Portage properties, and as at December 31, 2013 for Thornbury, Thornbury West, House River, Germain Wabiskaw and Boiler Rapids properties. These assets include oil sands resources in the familiar McMurray Formation, and the developing Grand Rapids, and Grosmont and Winterburn carbonate plays, all of which offer significant production potential.

This information release contains certain “forward-looking statements” within the meaning of such statements under applicable securities law including but not limited to the withdrawal of the receivership application, the satisfaction of amounts owing to proven and undisputed unsecured creditors, the termination of the CCAA process and timing thereof, the timing for appointment of a new board of directors, estimated cash and cash equivalent amounts, the receipt of certain anticipated receivables and Laricina’s future operational plans. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “estimate”, “intend”, “believe”, “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on Laricina’s experience and current beliefs as well as assumptions made by, and information currently available to, Laricina, and are subject to a variety of risks and uncertainties including, but not limited to, those associated with resource definition, unanticipated costs and expenses, regulatory approvals, fluctuating oil and gas prices, and the ability to access sufficient capital to finance future acquisitions and development. Although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this information release are not exhaustive and readers are not to place undue reliance on forward-looking statements. Laricina disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this message, except as required under applicable securities legislation. The forward-looking statements are expressly qualified by these cautionary statements.

For further information please visit or contact:

Marla Van Gelder
Vice President Corporate Development
Laricina Energy Ltd.
East Tower, 5th Ave Place
800, 425 1st Street SW
Calgary, AB. T2P 3L8

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