DXI Energy Inc (TSE:DXI) unveiled three transactions, which it said improve its financial position and are part of its plan to reduce interest-bearing debt, increase operating cash flow and improve financial viability.
The agreements effectively remove more than C$11 million in debt from the firm, the company said in a statement Friday.
The first is the settling of a C$6,967,000 financial contract liability that has hindered the oil firm's US subsidiary Dejour Energy (USA) Inc for several years, in return for assigning certain non-producing, non-core leasehold interests in the Piceance basin of Colorado.
Certain officers of the company have also agreed to forego C$280,000 in accrued compensation, which is payable to them, the Vancouver-based company revealed.
Thirdly, DXI said C$4,280,000 in secured loans from five individual lenders had been converted into shares at C$0.06 each.
"The conversion of C$4,280,000 in secured debt, accrued interest, foregoance of accrued payables and settlement of the C$6,967,000 financial contract liability is 'Step 1' in the implementation of the 2019 strategic plan designed to reduce interest-bearing debt, increase operating cash flow and improve financial viability," said chairman of the group Bob Hodgkinson.
"This series of agreements effectively removes over C$11,000,000 in debt burden, rebalancing the company's financial position. Furthermore, it clears the way to raise new capital to pursue prudent oil related business."
Of the C$4.28 million conversion, the firm said 13 million shares, representing C$780,000 is effective immediately.
The balance of C$3.5 million will be converted into around 58.3 million shares at C$0.06 per share, subject to the approval of the TSX and disinterested shareholders to be sought at the upcoming annual and special shareholder meeting to be held in April this year.
DXI is an oil and gas exploration and production company operating projects in Colorado's Piceance Basin and the Peace River Arch region in British Columbia.
Shares added 10% in Toronto to $0.055.