July 6, 2016 / 8:12 PM / 2 years ago

BRIEF-Paramount Resources to sell some of its deep basin Musreau/Kakwa assets to Seven Generations for $1.9 bln

July 6 (Reuters) - Paramount Resources Ltd :

* Paramount Resources Ltd enters into an agreement to sell 310 net sections of its deep basin musreau/kakwa assets to seven Generations Energy Ltd for total consideration of $1.9 billion

* Seven Generations provided paramount with a $80 million deposit, non-refundable except for certain instances as specified in agreement

* Seven Generations will also assume Paramount’s processing and transportation commitments relating to assets

* A canadian chartered bank has committed to provide company with a new $410 million credit facility upon closing of transaction

* New credit facility will amend and replace Paramount’s existing credit facility

* New facility will have two tranches, an extendible borrowing base tranche and a one year non-extendible margin tranche

* Consideration is comprised of C$475 million in cash, 33.5 million class a shares of 7G, 7G’s assumption of Paramount’s senior unsecured notes

* Initial capital spending for pro forma co will be focused on expanding company’s existing 4,500 boe/d karr/gold creek development

* Norton Rose Fulbright Canada LLP is acting as legal counsel to paramount on transaction

* Total consideration of approximately $1.9 billion

* Transaction was unanimously approved by both companies’ boards of directors

* Intends to commence a conditional consent solicitation in early to mid-July with regards to its senior unsecured notes due 2019

* Agreement provides for $80 million termination fee payable by paramount to seven generations in some circumstances

* After deal, Paramount will hold about 10 percent of outstanding 7G shares and will have approximately 10,500 boe/d of production

* Consent solicitation conditional on minimum acceptance from noteholders holding at least $100 million notes, with maximum of $300 million

* Clayton H. Riddell, paramount’s executive chairman, has entered into a voting support agreement with Seven Generations

* Pursuant to voting support agreement, Riddell agreed to vote all of class a shares of co owned/controlled by him in favour of deal

* BMO capital markets is acting as financial advisor to paramount on transaction Source text for Eikon: Further company coverage:

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