REL Portfolio Companies, Hammerhead and DCRD to merge
REL invests in Hammerhead, alongside
REL holds an interest in DCRD through a 5% position in the sponsor of DCRD (the "Sponsor"). The Sponsor is controlled by Riverstone, and the Sponsor holds Class B ordinary shares of DCRD ("founder shares"), which were acquired for
Assuming the approval by each of the Hammerhead shareholders and the DCRD shareholders, the transaction will result in the formation of a publicly traded upstream oil and gas company ("NewCo") with an identified investment program to decarbonize its oil and gas operations through the development of a carbon capture and sequestration ("CCS") program. NewCo's CCS program is estimated to require approximately
Closing of the transaction is likely to occur in Q1 2023, subject to approval of the shareholders of each of Hammerhead and DCRD and other customary closing conditions. Closing of the transaction is not subject to a minimum cash condition and the parties believe that Hammerhead's existing balance sheet with expected leverage, prior to any proceeds from DCRD's cash in trust, of 0.6x LTM EBITDA at year-end 2022 is expected to provide the liquidity necessary to execute on Hammerhead's business plan. NewCo is expected to be listed on the Nasdaq Capital Market ("Nasdaq") and trade under the ticker symbol "HHRS".
At closing, REL is expected to receive 15 million shares of HHRS (representing 12% pro forma ownership of HHRS assuming no redemptions by existing DCRD shareholders), which will be freely tradeable subject to customary lockup provisions and applicable blackout periods. Accordingly, REL's current privately held interest in Hammerhead will be replaced by a holding of publicly traded securities in HHRS which will be valued by REL by reference to HHRS's prevailing share price.
In connection with implementing the transaction under the applicable Fund V governing documents, the Sponsor and the other holders of the founder shares and warrants (collectively, the "
REL is a closed-ended investment company which invests in the energy industry that has since 2020 been exclusively focused on pursuing and has committed
For further details, see www.RiverstoneREL.com
About Decarbonization Plus Acquisition Corporation IV
Decarbonization Plus Acquisition Corporation IV is a blank check company formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with a target whose principal effort is developing and advancing a platform that decarbonizes the most carbon‐intensive sectors. DCRD is sponsored by an affiliate of
About Hammerhead Resources
Hammerhead Resources is a
Riverstone is an energy and power‐focused private investment firm founded in 2000 by
For further details, see www.RiverstoneLLC.com
The following information and disclaimers relate to the proposed business combination between Hammerhead and DCRD. Shareholders in REL should note that, as such, they will not be entitled to vote on the proposed business combination nor will they be sent any of the information or documentation referred to below.
Forward Looking Statements
This press release includes certain statements in respect of the proposed business combination between Hammerhead and DCRD that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include, for example, statements about Hammerhead's or DCRD's ability to effectuate the proposed business combination discussed in this press release; the benefits of the proposed business combination; the future financial performance of NewCo following the transactions; changes in Hammerhead's strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management; and the anticipated valuation of REL's interest in NewCo. These forward-looking statements are based on information available as of the date of this press release, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing REL's, NewCo's, Hammerhead's or DCRD's views as of any subsequent date, and none of REL, NewCo, Hammerhead or DCRD undertakes any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Neither REL, NewCo nor DCRD gives any assurance that either NewCo or DCRD will achieve its expectations. You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, NewCo's actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include: (i) the timing to complete the proposed business combination by DCRD's business combination deadline and the potential failure to obtain an extension of the business combination deadline if sought by DCRD; (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreements relating to the proposed business combination; (iii) the outcome of any legal, regulatory or governmental proceedings that may be instituted against NewCo, DCRD, Hammerhead or any investigation or inquiry following announcement of the proposed business combination, including in connection with the proposed business combination; (iv) the inability to complete the proposed business combination due to the failure to obtain approval of DCRD's shareholders; (v) Hammerhead's and NewCo's success in retaining or recruiting, or changes required in, its officers, key employees or directors following the proposed business combination; (vi) the ability of the parties to obtain the listing of NewCo's common shares and warrants on Nasdaq upon the closing of the proposed business combination; (vii) the risk that the proposed business combination disrupts current plans and operations of Hammerhead; (viii) the ability to recognize the anticipated benefits of the proposed business combination; (ix) unexpected costs related to the proposed business combination; (x) the amount of redemptions by DCRD's public shareholders being greater than expected; (xi) the management and board composition of NewCo following completion of the proposed business combination; (xii) limited liquidity and trading of NewCo's securities; (xiii) geopolitical risk and changes in applicable laws or regulations; (xiv) the possibility that Hammerhead or DCRD may be adversely affected by other economic, business, and/or competitive factors; (xv) operational risks; (xvi) the possibility that the COVID-19 pandemic or another major disease disrupts Hammerhead's business; (xvii) litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on Hammerhead's resources;(xix) the risks that the consummation of the proposed business combination is substantially delayed or does not occur; and (xx) other risks and uncertainties indicated from time to time in the proxy statement/prospectus proposed to be published relating to the proposed business combination, including those under "Risk Factors" therein, and in DCRD's other filings with the
No Offer or Solicitation
This communication includes information that relates to a proposed business combination between Hammerhead and DCRD. This document does not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed business combination. This document does not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities, nor shall there be any offer, sale or exchange of securities in any state or jurisdiction in which such offer, solicitation, sale or exchange would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities will be made except by means of a prospectus meeting the requirements of section 10 of the United States Securities Act of 1933, as amended, or an exemption therefrom.
Important Information and Where to Find It
In connection with the proposed business combination, DCRD and NewCo intend to file a registration statement in
DCRD shareholders and other interested persons will be able to obtain copies of the Registration Statement, including the preliminary proxy statement/prospectus contained therein, the definitive proxy statement/prospectus and other documents filed or that will be filed with the
Participants in the Solicitation
DCRD, Hammerhead, NewCo and their respective directors, officers and related persons may be deemed participants in the solicitation of proxies of DCRD shareholders in connection with the proposed business combination. More detailed information regarding the directors and officers of DCRD, and a description of their interests in DCRD, is contained in DCRD's filings with the
Head of Governance Services
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