Pieridae to merge with Pétrolia to create Canada’s first publicly traded LNG company

Natural gas exploration company Pieridae Energy has entered a definitive agreement to merge with Pétrolia, which is expected to create Canada’s first publicly traded, integrated liquefied natural gas (LNG) company.

The newly formed entity will be named Pieridae Energy Limited (Amalco) and will seek to strategically position itself in the North American equity markets as a fully developing integrated energy company, from upstream production to the sale of LNG.

Amalco is expected to benefit from the combined expertise and diversification of the two companies for an effective and sustainable long-term growth plan.

Pursuant to the agreement, Pieridae will raise $50m through a private placement at a price of $12.50 per subscription receipt.

In addition to financing operational and general working capital requirements, the funds garnered through the placement process will enable Amalco to reach the final investment decision with respect to the Goldboro LNG Project.

Pieridae Energy is considering making a final investment decision on the Goldboro LNG project by the end of this year, reported The Canadian Press.

The Goldboro LNG project is situated on the Atlantic Ocean coast, approximately 2km from the communities of Goldboro in the west and Drum Head in the east in Goldboro, Guysborough County, Nova Scotia.

The project's facilities include storage tanks, marine structures and gas processing equipment.

Pieridae has appointed a group of agents for the private placement, which will be co-led by Laurentian Bank Securities and National Bank Financial (NBF), including Desjardins Capital Markets Canada.

Following the closure of the placement process, Pieridae will pay the agents a cash commission equal to 5% of the gross proceeds of the private placement.

Upon completion of the agreement, the holders of Pétrolia and Pieridae shares will hold 14.75% and 85.25% of the outstanding Amalco Shares respectively.

The completion of the arrangement is subject to the approval of the TSX Venture Exchange, Pétrolia and Pieridae shareholders and of the court responsible for the business combination arrangement and other regulatory approvals.