Enterprise Group Announces $20 Million Bought Deal Public Offering
St. Albert, Alberta--(November 27, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"), a consolidator of services to the energy sector that is focused primarily on specialized equipment rental is pleased to announce that it has entered into an amended agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and Raymond James Ltd. (the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 13,157,900 common shares of the Company ("Offered Shares") at a price of $1.90 per Offered Share (the "Issue Price") for gross proceeds to the Company of approximately $25.0 million (the "Offering").
The Company has also granted the Underwriters an over-allotment option (the "Over-Allotment Option"), exercisable for a period of 30 days from the date of the closing of the Offering, to purchase up to an additional 15% of the aggregate common shares to be sold pursuant to the Offering. In the event the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering will be $28.8 million.
The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes. This funding initiative will support the Company's continued expansion plans, enabling it to capitalize on the robust growth opportunities currently in the burgeoning natural gas turbine power sector, while reinforcing its position as the leading player in the space. With robust activity fueling the current quarter and a strong pipeline of projects supporting future expansion, the Company believes it is well-positioned to continue delivering strong results going forward underscoring its commitment to creating shareholder value while driving sustained, long-term growth.
Closing of the Offering is expected to occur on or about December 12, 2024, or such other date as may be agreed upon by the Company and the Underwriters, subject to customary closing conditions, including required approvals of the Toronto Stock Exchange.
The shares to be issued under the Offering will be offered by way of a short form prospectus in each of the Provinces of Canada, except Quebec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws, and certain other jurisdictions outside of Canada and the United States.
This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in the U.S. Securities Act), absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Leonard Jaroszuk, CEO and co-founder, provided commentary, “Turbines cost $800,000 - $900,000 each. The cabling and distribution panels to power the site cost another $250,000 on average. Based on the rates being charged by Enterprise, the turbines pay for themselves in 16-18 months, while the cabling and distribution panels pay for themselves in 90 days. So these investments are highly accretive generating strong cash flows for the business. The idea is that the more that we deploy, the more cash we can generate. Market penetration is currently 16-18% of the addressable market, with many more new opportunities coming over the hill, so the growth potential is huge.... The turbines have a 20 to 25 year life span."
With these kinds of dynamics, it makes sense to max out investment.
Q3 figures have resulted in a draw down presenting an interesting entry opportunity today.
While the quarter was softer than the corresponding period last year, the nine-months to September were better than last year. Quarterly cyclicality in the oil and gas sector is nothing new.
The investment thesis still looks very much in tact.
Key points I pulled out of the quarterly release:
(a) Third quarter saw a reduction in activity... for two primary reasons. First was apprehension and preparation for a potentially severe forest fire season, leading some customers to delay the execution of planned projects to the end of the forest fire season. The second reason was some customers took advantage of the summer months to allow employees extended time off to prepare employees for the up coming demands of another year of busy field activity
(b) The increasing demand for natural gas power generation systems indicates a shift towards lower emission alternatives, and going forward, market conditions remain favourable for the energy sector, resulting in increased drilling, completion, and infrastructure projects. These factors are expected to continue for the remainder of 2024 and 2025.
(c) During the nine months ended September 30, 2024, the Company acquired $13,452,761 of capital assets, primarily for natural gas power generation equipment and facilities, upgrading existing equipment, and meeting specific requests from customers.
(d) Enterprise announced a new five year exclusivity agreement with FlexEnergy Solutions... The agreement positions Enterprise... as the sole provider of short-term turbine and microturbine applications across all commercial and industrial sectors in Alberta and British Columbia.
My take away from this are:
1. Low activity in Q3 will very likely translate to higher activity in the quarters to follow
2. Both customers and Enterprise are gearing up for an acceleration in activity
3. We still have the LNG revolution happening from 2025 in Canada
4. The company is still expanding into adjacent industries and expanding its territorial reach
Enterprise Group Announces Successful Flare Gas Application for New Client
St. Albert, Alberta--(November 20, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"), a consolidator of energy services (including specialized equipment and services to the energy/resource sector), emphasizes technologies that mitigate, reduce, or eliminate CO2 and Green House Gas (GHG) and other harmful emissions for small local and Tier One resource clients, along with its wholly owned subsidiary, Evolution Power Projects ("EPP"), is pleased to announce the early success of an ongoing flare gas utilization project in North Central Alberta with a new client.
Desmond O'Kell, President of Enterprise Group, emphasized the significance of this achievement, noting, "Firstly, it allows us to support a client in leveraging excess natural gas production in areas restricted by minimal infrastructure. Secondly, our advanced turbine technology offers Operators and Midstreamers a novel method to meet stringent flaring and emissions standards effectively." This initiative showcases our commitment to providing environmentally friendly, low-emission mobile power systems, demonstrating their efficacy in delivering cost-effective and advanced solutions for remote power needs. This project adds to our expanding portfolio of clients who prioritize efficient and sustainable energy solutions.
EPP's mobile turbine power generation units, known for their significant fuel tolerance, are now utilizing the client's excess gas production to generate about 1 megawatt of continuous power. This power is now readily available for various on-site applications, including production enhancement, further field development, and other local infrastructure needs.
Enterprise views this flare gas solution as highly beneficial for the industry, especially as regulations on flaring have become much stricter in recent years. EPP is compiling daily operational performance data to be used in marketing and business development efforts, which the company expects will boost demand for its mobile turbine equipment as this project site is currently utilizing approximately 13% of EPP's natural gas power fleet.
Enterprise Group continues to advance its position as the sole provider of low emission site electrification power systems to the Canadian energy industry. Canadian energy producers who are enthusiastic about emission reductions, efficiency, safety and drastically lowering their fuel costs are turning to Enterprise's methods by displacing diesel and utilizing natural gas on their project sites. On the majority of project sites, natural gas produced locally by the client is powering the turbine power generators, thus eliminating third party fuel costs.
UPDATE
Press Release | November 27, 2024
Enterprise Group Announces $20 Million Bought Deal Public Offering
St. Albert, Alberta--(November 27, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"), a consolidator of services to the energy sector that is focused primarily on specialized equipment rental is pleased to announce that it has entered into an amended agreement with a syndicate of underwriters led by Canaccord Genuity Corp. and Raymond James Ltd. (the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a bought deal basis, 13,157,900 common shares of the Company ("Offered Shares") at a price of $1.90 per Offered Share (the "Issue Price") for gross proceeds to the Company of approximately $25.0 million (the "Offering").
The Company has also granted the Underwriters an over-allotment option (the "Over-Allotment Option"), exercisable for a period of 30 days from the date of the closing of the Offering, to purchase up to an additional 15% of the aggregate common shares to be sold pursuant to the Offering. In the event the Over-Allotment Option is exercised in full, the aggregate gross proceeds of the Offering will be $28.8 million.
The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes. This funding initiative will support the Company's continued expansion plans, enabling it to capitalize on the robust growth opportunities currently in the burgeoning natural gas turbine power sector, while reinforcing its position as the leading player in the space. With robust activity fueling the current quarter and a strong pipeline of projects supporting future expansion, the Company believes it is well-positioned to continue delivering strong results going forward underscoring its commitment to creating shareholder value while driving sustained, long-term growth.
Closing of the Offering is expected to occur on or about December 12, 2024, or such other date as may be agreed upon by the Company and the Underwriters, subject to customary closing conditions, including required approvals of the Toronto Stock Exchange.
The shares to be issued under the Offering will be offered by way of a short form prospectus in each of the Provinces of Canada, except Quebec, and may be offered in the United States on a private placement basis pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and applicable state securities laws, and certain other jurisdictions outside of Canada and the United States.
This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons (as defined in the U.S. Securities Act), absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Leonard Jaroszuk, CEO and co-founder, provided commentary, “Turbines cost $800,000 - $900,000 each. The cabling and distribution panels to power the site cost another $250,000 on average. Based on the rates being charged by Enterprise, the turbines pay for themselves in 16-18 months, while the cabling and distribution panels pay for themselves in 90 days. So these investments are highly accretive generating strong cash flows for the business. The idea is that the more that we deploy, the more cash we can generate. Market penetration is currently 16-18% of the addressable market, with many more new opportunities coming over the hill, so the growth potential is huge.... The turbines have a 20 to 25 year life span."
With these kinds of dynamics, it makes sense to max out investment.
Q3 figures have resulted in a draw down presenting an interesting entry opportunity today.
While the quarter was softer than the corresponding period last year, the nine-months to September were better than last year. Quarterly cyclicality in the oil and gas sector is nothing new.
The investment thesis still looks very much in tact.
Key points I pulled out of the quarterly release:
(a) Third quarter saw a reduction in activity... for two primary reasons. First was apprehension and preparation for a potentially severe forest fire season, leading some customers to delay the execution of planned projects to the end of the forest fire season. The second reason was some customers took advantage of the summer months to allow employees extended time off to prepare employees for the up coming demands of another year of busy field activity
(b) The increasing demand for natural gas power generation systems indicates a shift towards lower emission alternatives, and going forward, market conditions remain favourable for the energy sector, resulting in increased drilling, completion, and infrastructure projects. These factors are expected to continue for the remainder of 2024 and 2025.
(c) During the nine months ended September 30, 2024, the Company acquired $13,452,761 of capital assets, primarily for natural gas power generation equipment and facilities, upgrading existing equipment, and meeting specific requests from customers.
(d) Enterprise announced a new five year exclusivity agreement with FlexEnergy Solutions... The agreement positions Enterprise... as the sole provider of short-term turbine and microturbine applications across all commercial and industrial sectors in Alberta and British Columbia.
My take away from this are:
1. Low activity in Q3 will very likely translate to higher activity in the quarters to follow
2. Both customers and Enterprise are gearing up for an acceleration in activity
3. We still have the LNG revolution happening from 2025 in Canada
4. The company is still expanding into adjacent industries and expanding its territorial reach
Press Release | November 20, 2024
Enterprise Group Announces Successful Flare Gas Application for New Client
St. Albert, Alberta--(November 20, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"), a consolidator of energy services (including specialized equipment and services to the energy/resource sector), emphasizes technologies that mitigate, reduce, or eliminate CO2 and Green House Gas (GHG) and other harmful emissions for small local and Tier One resource clients, along with its wholly owned subsidiary, Evolution Power Projects ("EPP"), is pleased to announce the early success of an ongoing flare gas utilization project in North Central Alberta with a new client.
Desmond O'Kell, President of Enterprise Group, emphasized the significance of this achievement, noting, "Firstly, it allows us to support a client in leveraging excess natural gas production in areas restricted by minimal infrastructure. Secondly, our advanced turbine technology offers Operators and Midstreamers a novel method to meet stringent flaring and emissions standards effectively." This initiative showcases our commitment to providing environmentally friendly, low-emission mobile power systems, demonstrating their efficacy in delivering cost-effective and advanced solutions for remote power needs. This project adds to our expanding portfolio of clients who prioritize efficient and sustainable energy solutions.
EPP's mobile turbine power generation units, known for their significant fuel tolerance, are now utilizing the client's excess gas production to generate about 1 megawatt of continuous power. This power is now readily available for various on-site applications, including production enhancement, further field development, and other local infrastructure needs.
Enterprise views this flare gas solution as highly beneficial for the industry, especially as regulations on flaring have become much stricter in recent years. EPP is compiling daily operational performance data to be used in marketing and business development efforts, which the company expects will boost demand for its mobile turbine equipment as this project site is currently utilizing approximately 13% of EPP's natural gas power fleet.
Enterprise Group continues to advance its position as the sole provider of low emission site electrification power systems to the Canadian energy industry. Canadian energy producers who are enthusiastic about emission reductions, efficiency, safety and drastically lowering their fuel costs are turning to Enterprise's methods by displacing diesel and utilizing natural gas on their project sites. On the majority of project sites, natural gas produced locally by the client is powering the turbine power generators, thus eliminating third party fuel costs.