Geothermal developer DEEP secures C$4.5m new equity funding
Saskatchewan, Canada-based geothermal developer DEEP Earth Energy Production Corp. has secured new equity through a placement and strategic investment by Canadian drilling services company.
Canadian geothermal developer DEEP Earth Energy Production Corp. (“DEEP”) has announced the closing on a $4.5 million private placement offering. This translates to roughly USD 3.6 million.
The company received subscriptions for 4,948,100 units of the Company (each a “Unit”) at CAD$0.85 per Unit, for gross proceeds to the Corporation of $4,205,885. Each Unit is comprised of one (1) Class “A” common voting share of the Corporation (each a “Common Share”) and one (1) warrant (each a “Warrant”) issued for no additional consideration. Each Warrant entitles the holder thereof to purchase an additional Common Share on payment to the Corporation of the exercise price of CAD$1.00 per Warrant at any time prior to that date which is 36 months from the date the Warrant is issued. The company also received subscriptions for 310,000 shares issued on a flow-through basis under the Income Tax Act (Canada) (each a “Flow-Through Share”) at CAD$1.00 per share for gross proceeds to the Corporation of CAD$310,000.
PHX Energy Services Corp. (“PHX Energy”) (TSX: PHX) announced on July 20, 2021 that it had made a strategic investment in DEEP. PHX Energy’s investment in DEEP is $3,000,500 with a provision for another $3,500,000 of equity upon the potential exercise of warrants held by PHX Energy. In addition to participating in DEEP’s latest financing round, John Hooks, CEO of PHX Energy, has joined DEEP’s Board of Directors.
“DEEP’s vision to build up to 160 MW of geothermal power and direct heating infrastructure will create a new, green $1 Billion industry for southeast Saskatchewan” said Kirsten Marcia, DEEP President & CEO. “A key objective of DEEP’s strategy is to merge highly skilled oil and gas expertise with specialized geothermal reservoir and power generation expertise. We are very excited that PHX Energy will be bringing additional specialized technology capabilities and industry expertise to our Board of Directors.”
“We are excited about this opportunity to diversify our business to include renewable energy projects like the DEEP Geothermal Project and we will continue to focus on ways to ensure long term sustainable growth for the business”, said John Hooks, CEO of the Corporation. “Through our position in DEEP, we will be able to provide our technical expertise to the DEEP Geothermal Project. The first 32 MW facility is anticipated to commence construction in 2022 and involves a plan to drill 18 horizontal wells, each with a total length of approximately 7,000 meters. Subsequent phases are projected to reach 160 MW with additional drilling and construction. Based on our extensive international directional drilling experience and industry leading technology, we are confident we can make a meaningful contribution to DEEP’s business strategy and through our equity investment share in future growth. The geothermal industry experience gained through our involvement with DEEP also positions us favorably to participate in other geothermal projects in North America and internationally.”
DEEP is developing geothermal resources to meet increasing energy needs with sustainable, clean and renewable energy. The company is advancing its first 20-32 MW geothermal power facility in southern Saskatchewan that will produce emission-free baseload power. This first facility is on track for full commissioning by early 2024. A staged build aims to increase the project to produce 100-200 MW of renewable power generation.
PHX Energy Services, through its directional drilling subsidiary entities, provides horizontal and directional drilling technology and services to oil and natural gas producing companies in Canada, the US and the Middle East through a partnership with National Energy Services Reunited Corp. The common shares of PHX Energy are traded on the Toronto Stock Exchange under the symbol “PHX”.
Source: Company release by email