Vesta Energy Corp. Announces Offer to Exchange New 10.000% Second Lien Senior Secured Step-Up Notes Due 2026 for its 8.125% Senior Unsecured Notes Due 2023 and Related Consent Solicitation

CALGARY, AB, Oct. 14, 2021 /CNW/ - Vesta Energy Corp. ("Vesta") is pleased to announce that it has commenced an offer to exchange an equivalent aggregate principal amount of newly issued 10.000% second lien senior secured step-up notes due October 15, 2026 (the "New Notes") for properly tendered, and not validly withdrawn, 8.125% senior unsecured notes due July 24, 2023 (the "Existing Notes"), as more fully described in, and upon the terms and subject to the conditions set forth in, the Exchange Offer and Consent Solicitation Statement of Vesta dated October 14, 2021 (together with any amendments or supplements thereto, the "Exchange Offer and Consent Solicitation Statement") (the "Exchange Offer").

The New Notes will mature on October 15, 2026, if an Extension Event (as defined in the Exchange Offer and Consent Solicitation Statement) occurs on or prior to December 31, 2022, otherwise the New Notes will mature on October 15, 2025. We will pay interest on the New Notes semi-annually in arrears in equal installments on April 15 and October 15 of each year, commencing on April 15, 2022. The New Notes will accrue interest at the rate of 10% per annum from the Settlement Date (as defined below) to October 15, 2023, 11% per annum from October 15, 2023 to October 15, 2024 and 12% per annum thereafter. The New Notes will be issued pursuant to a trust indenture between Vesta and Olympia Trust Company, as trustee and collateral agent. The New Notes will be fully and unconditionally guaranteed on a senior secured basis by Vesta Energy Ltd. (the "Guarantor"), a wholly-owned subsidiary of Vesta. In addition, the New Notes will be secured by a second-priority security interest (subject to permitted liens) in all assets and properties of Vesta and the Guarantor (subject to certain exceptions).

Concurrent with the Exchange Offer, Vesta is also soliciting consents from holders of Existing Notes to amend the trust indenture dated July 24, 2018 (the "Existing Indenture") between Vesta and Computershare Trust Company of Canada, as trustee, upon the terms and subject to the conditions set forth in the Exchange Offer and Consent Solicitation Statement (the "Consent Solicitation"). Vesta is soliciting consents from holders of Existing Notes to amend the Existing Indenture and Existing Notes in order to, among other things, remove certain covenants and events of default contained in the Existing Indenture and the Existing Notes, as set out in the Exchange Offer and Consent Solicitation Statement (the "Proposed Amendments"). Pursuant to the terms and conditions of the Existing Indenture, the Proposed Amendments require the consent of holders representing at least a majority of the aggregate principal amount of Existing Notes outstanding.

The Exchange Offer is being made, and the New Notes are being offered and sold, to "accredited investors" in each of the provinces of Canada on a private placement basis in accordance with National Instrument 45-106 ? Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), as applicable, without the filing of a prospectus. The Exchange Offer is being made, and the New Notes are being offered and sold, only to "qualified institutional buyers" (as defined in Rule 144A under the United States Securities Act of 1933, as amended) in the United States in reliance on an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws and to certain non-U.S. persons in reliance on Regulation S. Only the holders of Existing Notes who have certified to Vesta that they are eligible to participate in the Exchange Offer and Consent Solicitation pursuant to either of the foregoing circumstances (the "Eligible Holders") may participate in the Exchange Offer and Consent Solicitation. In order to participate in the Exchange Offer, Eligible Holders are required to complete, execute and deliver to Computershare Investor Services Inc., as exchange agent, a letter certifying their eligibility to participate in the Exchange Offer, a copy of which is appended to the Exchange Offer and Consent Solicitation Statement and otherwise available from RBC Dominion Securities Inc. and National Bank Financial Inc., the dealer managers for the Exchange Offer and Consent Solicitation.

The Exchange Offer and Consent Solicitation will expire at 7:00 p.m. (Toronto time) on November 12, 2021, unless extended or earlier terminated by Vesta in its sole discretion (such time and date, as may be extended, the "Expiration Time"). If their Existing Notes are exchanged under the Exchange Offer, Eligible Holders who properly tender, and have not validly withdrawn, Existing Notes at or prior to 5:00 p.m. (Toronto time) on October 27, 2021, unless extended by Vesta (such time and date, as may be extended, the "Early Tender Time"), will receive an equivalent aggregate principal amount of New Notes. If their Existing Notes are exchanged under the Exchange Offer, Eligible Holders who properly tender, and have not validly withdrawn, Existing Notes after the Early Tender Time, but prior to the Expiration Time, will receive $950 principal amount of New Notes per $1,000 principal amount of Existing Notes. Tenders of Existing Notes may be withdrawn prior to 5:00 p.m. (Toronto time) on October 27, 2021, but not thereafter, subject to limited exceptions, unless such time is extended by Vesta (such time and date, as may be extended, the "Withdrawal Deadline").

If Existing Notes are properly tendered to the Exchange Offer, and not validly withdrawn, by an Eligible Holder, such Eligible Holder will be entitled to receive on or about November 16, 2021 (such date, as may be extended, the "Settlement Date") accrued and unpaid interest, if any, in cash on such Existing Notes from the last interest payment date to, but not including, the Settlement Date. Eligible Holders of Existing Notes properly tendered to the Exchange Offer, and not validly withdrawn, will not be entitled to receive any interest on the Existing Notes accruing after the Settlement Date. 

Eligible Holders may not consent to the Proposed Amendments without tendering their Existing Notes to the Exchange Offer, and Eligible Holders may not tender their Existing Notes to the Exchange Offer without consenting to the Proposed Amendments. By tendering Existing Notes to the Exchange Offer, Eligible Holders will be deemed to have validly provided their consent to the Proposed Amendments.

The Exchange Offer is conditional on the satisfaction of certain conditions, including that Eligible Holders holding greater than 50% of the aggregate principal amount of Existing Notes outstanding shall have tendered their Existing Notes to the Exchange Offer and, following completion of the Exchange Offer and Consent Solicitation, Vesta shall have, in its sole discretion, sufficient liquidity to carry on its business as it intends to conduct it and that the Requisite Consent to the Proposed Amendments is received. The Exchange Offer is also conditional on the extension, on or prior to the Settlement Date, of the maturity date of Vesta's senior secured revolving syndicated credit facilities to May 1, 2023 or later, which condition may not be waived by Vesta. Vesta has the right to amend or extend the Exchange Offer and Consent Solicitation for any reason at any time on or prior to the Settlement Date, and to terminate or withdraw the Exchange Offer and Consent Solicitation for any reason at any time on or prior to the Settlement Date, including if any of the conditions described in the Exchange Offer and Consent Solicitation Statement are not satisfied, or not anticipated to be satisfied, on or prior to the Settlement Date.

Vesta has received indicative confirmations from certain holders of Existing Notes, collectively holding $97.5 million aggregate principal amount of Existing Notes (representing approximately 48.75% of the aggregate principal amount of Existing Notes outstanding), that such holders will tender their Existing Notes to the Exchange Offer prior to the Early Tender Time and consent to the Proposed Amendments to the Existing Indenture and the Existing Notes.

A copy of the Exchange Offer and Consent Solicitation Statement, together with the appendices thereto, has been posted to the online portal for holders of Existing Notes. Eligible Holders who have questions or require further information about the Exchange Offer and Consent Solicitation are encouraged to contact RBC Dominion Securities Inc. at 1-416-842-6311 or 1-877-381-2099 (Toll Free) or by email to [email protected] or Computershare Investor Services, the exchange agent for the Exchange Offer and Consent Solicitation, at 1-800-564-6253 (Canada and U.S.) or 1-514-982-7555 (Outside North America) or by e-mail to [email protected]. Eligible Holders are urged to read the Exchange Offer and Consent Solicitation Statement in its entirety and consult with its own investment, legal, tax and other advisors as needed to assist in making a decision to participate in the Exchange Offer and Consent Solicitation and to advise whether the participation in the Exchange Offer and investment in the New Notes is legally permitted.

This press release does not constitute an offer to exchange Existing Notes for New Notes, and there shall not be any exchange of Existing Notes for New Notes in any jurisdiction in which such exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The New Notes have not been, and will not be, registered or qualified under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), Canadian securities laws or the securities laws of any other jurisdiction. The New Notes may not be offered or sold within the United States except to "qualified institutional buyers" as defined in Rule 144A under the U.S. Securities Act in reliance on one or more exemptions from the registration requirement under the U.S. Securities Act or in offshore transactions in reliance on Regulation S under the U.S. Securities Act. The New Notes may not be offered or sold within Canada except to "accredited investors" as defined in National Instrument 45-106 ? Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), as applicable, in reliance on one or more exemptions from the prospectus requirements under Canadian securities laws.

About Vesta

Vesta is a privately held, growth-oriented exploration and production company focused on the exploration, development and production of light oil-weighted properties in the Western Canadian Sedimentary Basin. Vesta is a light-oil weighted company with assets in the central Alberta East Duvernay resource play. The East Duvernay resource play is one of the premier light oil resource plays in North America, and the netbacks and corporate returns Vesta expects to achieve are competitive with the best resource plays in North America. Vesta expects to be able to attain competitive full-cycle corporate returns through a combination of Vesta's netbacks, cost structure, infrastructure ownership and a disciplined approach to capital deployment.

Forward-Looking Statements and Information

Certain statements contained in this press release constitute forward-looking statements and forward-looking information within the meaning of applicable securities laws. In certain cases, forward-looking statements and information can be identified by the use of words such as "plans", "contemplates", "expects" or "does not expect", "is expected", "budget", "goal", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. More particularly and without limitation, this press release contains forward-looking statements and information relating to the timing and completion of the Exchange Offer and Consent Solicitation and that certain holders of Existing Notes will tender their Existing Notes to the Exchange Offer prior to the Early Tender Time and consent to the Proposed Amendments to the Existing Indenture and the Existing Notes.

These forward-looking statements and information are based on certain key expectations and assumptions made by Vesta in light of its beliefs, estimates and opinions, including those described in the Exchange Offer and Consent Solicitation Statement.

Although Vesta believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information as Vesta cannot give any assurance that they will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks, including those described in the Exchange Offer and Consent Solicitation Statement. The forward-looking statements and information contained in this press release are made as of the date hereof and Vesta does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

SOURCE Vesta Energy Corp.