LNG Energy Group Corp. (TSXV: LNGE) (TSXV: LNGE.WT) (OTCQB: LNGNF) (FWB: E26) (the “Company” or “LNG Energy Group”) today provided an update with respect to its previously announced strategic review (the “Strategic Review”). As previously announced, the Board of Directors of the Company has initiated, with the assistance of financial advisors, a strategic review process to explore and evaluate a broad range of potential options for the Company to enhance shareholder value. This review process will assess strategic alternatives that may include, but are not limited to financings, strategic partnerships, strategic investments, accretive acquisitions, a potential sale, merger or other business combination.
Capital Strengthening and Financing Update
The Company is in the process of farming out a non-operating portion of its participating interest in the VIM-41 Block located onshore Colombia, and of pursuing a well development financing (“JV Contribution”) in order to raise capital to initiate the drilling of the B5 well located onshore Colombia. Furthermore, the Company intends to review options to optimize cash flow available for drilling vis a vis its financial obligations.
In conjunction with its near-term development plans, the Company has entered into an agreement with ECM Capital Advisors Inc. in respect of the Strategic Review in order to assist the Company in assessing all strategic alternatives, including financings, asset sales other potential transactions. The previously announced engagement agreement with Eight Capital has been mutually terminated by the parties thereto.
Other Initiatives
In connection with the foregoing initiatives, the Company is pleased to announce an amendment (the “Amendment”) to the senior secured credit agreement entered into by LNG Canada Holdco Inc. (the “Borrower”), as borrower, Lewis Energy Colombia, Inc., as guarantor (the “Guarantor” and together with the Borrower, the “Loan Parties”) and Macquarie Group Ltd., as administrative agent, and the other lenders (the “Lenders”) dated August 15, 2023 (the “Credit Agreement”). As of the date hereof, the Company has amortized approximately U.S.$20 million of the initial principal outstanding (approximately C$0.17 per common share outstanding) and reaching an aggregate principal amount outstanding in respect of the Credit Agreement of approximately U.S.$50 million. Pursuant to the terms of the Amendment, the Lenders have agreed to certain covenant relief in order to allow for the foregoing strategic initiatives to be entered into by the Company and its subsidiaries, as well as funding of its drilling program.
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