LGX Oil + Gas Inc. (TSXV:OIL) entered into an asset acquisition agreement to acquire light oil assets focused in the Manyberries area of Southeast Alberta for CAD 46.2 million in cash and stock on October 18, 2012. LGX Oil + Gas Inc. will pay CAD 42.5 million in cash and issue approximately 4.07 million of its common shares as consideration. LGX Oil + Gas Inc. has deposited CAD 2.3 million in an escrow account which is refundable to LGX if the deal does not close, except in the event of default by LGX Oil + Gas Inc. Also, LGX Oil + Gas Inc. has entered into an agreement, on a bought deal basis, with a syndicate of underwriters co-led by FirstEnergy Capital Corp., Raymond James Ltd. and including GMP Securities L.P., Macquarie Capital Markets Canada Ltd., National Bank Financial Inc., Scotia Capital Inc. and BMO Capital Markets Inc. for an offering of 49.5 million subscription receipts at a price of CAD 0.86 each and 4.8 million common shares issued on a flow-through basis at a price of CAD 1.04 each to raise gross proceeds of CAD 47.6 million. If the deal is not completed on or before December 31, 2012, holders of subscription receipts will receive a cash payment equal to the offering price of the subscription receipts and any interest that was earned thereon during the time of escrow. The net proceeds of the offering will be used to fund the cash purchase price payable by LGX pursuant to the transaction and for general corporate purposes. For the year ended December 31, 2011, Manyberries Area of Southeast Alberta generated revenues of CAD 18.64 million and EBIT of CAD 11.97 million.

The deal is subject to certain conditions and the receipt of all regulatory approvals, including the approval of the TSX Venture Exchange and is expected to close on or about November 6, 2012. The deal is highly accretive to LGX Oil + Gas Inc. on cash flow per share and brings to the company a low decline, free cash flow generating light oil property with development upside. FirstEnergy Capital Corp., GMP Securities L.P. and Raymond James Ltd. acted as financial advisors for LGX Oil + Gas Inc.

LGX Oil + Gas Inc. (TSXV:OIL) completed the acquisition of light oil assets focused in the Manyberries area of Southeast Alberta on November 7, 2012.