(Source: Business Wire)
Royale Energy Inc. (NASDAQ:ROYL) announces the signing of a
definitive agreement for the private placement of approximately $2
Million of common stock and warrants on October 16, 2009. Funds from the
offering will be used for working capital that will allow the company to
accelerate drilling of wells in follow up to the recently announced
discovery. In addition to the Wylie well that will be started this week,
the company will now initiate the permit process for the Vann and Magnum
prospects, which it expects to begin drilling before the end of next
quarter.
The shares of common stock and warrants being sold in the placement have
not been registered under the Securities Act and may not be offered or
sold without registration with the Securities and Exchange Commission,
or under an applicable exemption. The terms of the agreement include the
sale of 623,053 shares of common stock at $3.21 per share, and warrants
which are immediately exercisable for a period of 5 years into 342,679
shares in the aggregate at $3.53 per share. The warrants contain
customary adjustments for corporate events such as reorganizations,
splits and dividends, and the exercise price of such warrants is subject
to weighted-average anti-dilution adjustments in the event of additional
issuances of common stock below the exercise price then in effect. The
Company will also provide customary registration rights in connection
with the transaction. The investor has also agreed to waive the upward
share adjustment portion of the anti-dilution provision that exists in
the warrant issued in connection with its 2008 purchase, solely in
connection with this transaction.
J.P. Turner & Company held a key role in the placement by acting as
agent for the placement to a single institutional investor.
Stephen Hosmer, the company's Chief Financial Officer, said "We are
pleased at the confidence shown in this new discovery, and the
timeliness at which we will now be able to follow up with additional
drilling."
About the Company
Headquartered in San Diego, Royale Energy, Inc. is an independent energy
company. The company is focused on development, acquisition,
exploration, and production of natural gas and oil in California, Texas
and the Rocky Mountains. It has been a leading independent producer of
oil and natural gas for over 20 years. The company's strength is
continually reaffirmed by investors who participate in funding over 50%
of the company's new projects. Additional information about Royale
Energy, Inc. is available on its web site at www.royl.com.
Forward Looking Statements
In addition to historical information contained herein, this news
release contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, subject to various
risks and uncertainties that could cause the company's actual results to
differ materially from those in the "forward-looking" statements. While
the company believes its forward looking statements are based upon
reasonable assumptions, there are factors that are difficult to predict
and that are influenced by economic and other conditions beyond the
company's control. Investors are directed to consider such risks and
other uncertainties discussed in documents filed by the company with the
Securities and Exchange Commission.
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