TAG Oil Ltd. (TSX: TAO andOTCQX: TAOIF) has conducted a detailed evaluation of the overall business environment and opportunities for the Company to create long-term value for its shareholders following the New Zealand asset sale. TAG's Board and management have determined that a return of capital to its shareholders in the amount of C$0.30 per common share (~C$25.6 million in cash), in accordance with Canadian income tax law, is in the best interest of shareholders.
The return of capital is scheduled to be paid on April 14, 2020 (payment date) to all shareholders of record of the common shares of the Company on March 27, 2020 (record date).
The Toronto Stock Exchange has decided to implement "due bill" trading for the return of capital distribution. Due bills represent entitlements to cash, and will attach to common shares between the first trading day prior to the record date for the return of capital and the payment date, allowing common shares to carry the value of the entitlement to the return of capital until such is paid. When due bills are used, the ex-distribution date is deferred to the first trading day after the payment date.
TAG's common shares will commence trading on a due bill basis from March 26, 2020 (at the opening) until April 14, 2020 (at the close) and will commence trading "ex-distribution" on April 15, 2020. The due bill redemption date (i.e., the date when holders of due bill entitlements are expected to settle their entitlements) will be April 16, 2020.
Following the return of capital, the Company will retain ~C$15 million in cash along with the 2.5% gross overriding royalty on all future production from the New Zealand assets sold and up to US$4.5 million in future event specific payments payable on Tamarind Resources Pte. Ltd. achieving certain milestones. TAG will have enough capital to continue its business operations as currently operated for the foreseeable future.
Source: TAG Oil
Date: Mar 16, 2020