Longreach Announces Closing of $9,700,000 Non-Brokered Private Placement

   Longreach Announces Closing of $9,700,000 Non-Brokered Private Placement  PR Newswire  SAINT HELIER, Jersey, April 10, 2014  SAINT HELIER, Jersey,  April 10,  2014 /PRNewswire/  - LONGREACH  OIL AND  GAS  LIMITED (TSXV: LOI) (the"Company" or "Longreach") is pleased to announce that it has closed today a non-brokered  private placement of units with  investors  for aggregate  gross proceeds  to  the Company  of $9,700,000    (the"Private  Placement"). The  subscription  price  per  unit was  $1,000  and  each  unit  consisted of  one 10%  secured convertible  debenture of  the Company  in  the  principal amount of $1,000 (collectively, the"Debentures") and 1,000 ordinary share purchase warrants (collectively,the"Warrants").  Net proceeds of  the Private  Placement will be  used to  support the  ongoing  drilling of the Company's Kamar well at Sidi Moktar and for general  corporate  and  administrative  purposes.  The  completion  of  the  Private   Placement  (described initially in the Company's press release dated March 3, 2014)  will  permit the Company to continue with its contracted drilling activities of  the  Kamar well at  Sidi Moktar.  The Company intends  to refinance  or repay  the  indebtedness under the Debentures through the proceeds of a subsequent  public  or private offering of equity securities, which may include a rights  offering  to all shareholders of the Company.  The Debentures mature two years from the date of closing and bear interest  at  a rate of 10%  per annum, payable quarterly  in arrears. Following the  first  anniversary of the  date of closing,  holders of Debentures  may convert  from  time to time, in whole or in part, outstanding principal under the  Debentures  into ordinary shares of the Company ("Shares") at a conversion price equal  to  the  greater  of:  (a)  $0.30  (subject  to  typical  adjustments  in  certain  circumstances); and (b) the current market price of the Shares at the time  of  conversion (based on the volume weighted  average trading price of the  Shares  for the 20 trading days ending on the fifth trading day preceding the date  of  conversion). Holders of Debentures are restricted from converting  Debentures  without the  approval  of  the  TSX  Venture  Exchange  if,  as  a  result  of  conversion, the holder  would hold  more than 20%  of the  issued Shares.  In  addition, following the first anniversary of the date of closing, the  Company  may redeem from time to time, in whole or in part, outstanding principal under the Debentures for cash at a redemption  price equal to the face value of  the  principal amount  being redeemed,  plus an  amount equal  to three  months  of  interest calculated on the amount of Debentures being redeemed.  The obligations of the Company under the Debentures are secured by a  security  interest in  the  Company's  present  and  after  acquired  property  and,  in  connection therewith, the Company  and holders of  Debentures have executed  a  general  security  agreement  under  the  laws  of  Jersey  (Channel  Islands)  providing a security interest in favour of the Debenture holders.  The Debentures provide customary  events of default  including failure to  pay  interest when due within 30 days, failure to repay principal on redemption  or  maturity,  and  the  occurrence  of  insolvency  events  or  proceedings.  In  addition, the  Company has  made certain  covenants in  favour of  holders  of  Debentures,  including  covenanting  not  to  incur  additional  indebtedness,  covenanting to  use  commercially reasonable  efforts  to complete  an  equity  financing within  one year  for the  purpose of  repaying or  refinancing  the  Debentures, and covenanting  to use  commercially reasonable  efforts to  seek  shareholder approval  in  certain circumstances  for  the creation  of  a  new  control person, if  requested by a  holder of Debentures  who would  otherwise  need such approval in order to permit the full conversion of Debentures.  Each Warrant is exercisable for a term of two years following closing and  may  be exercised for one Share at an exercise price of $0.30 per Share (subject to typical adjustments in certain circumstances).  Holders of Warrants are  also  restricted from exercising Warrants  without the approval  of the TSX  Venture  Exchange if, as a result of exercise,  the holder would hold more than 20%  of  the issued Shares.  A commission in the  amount of $315,800,  representing approximately 3.26%  of  the gross proceeds,  is payable  to a finder  in connection  with the  Private  Placement.  Two of  the investors  in the  Private Placement,  being Dundee  Corporation    ("Dundee") and funds  advised by West  Face Capital Inc.   ("West Face"),  are  significant shareholders of Longreach, holding 12,291,146 Shares (representing approximately 15.15% of the issued Shares) and 8,571,453 Shares  (representing  approximately 10.56% of  the issued Shares),  respectively. Accordingly,  the  participation of  these insiders  in  the Private  Placement is  considered  a  "related party transaction"  pursuant to  applicable securities  laws and  the  policies of the TSX Venture Exchange (the"TSXV").  Dundee subscribed for a total of 2,820 units comprised of $2,820,000 principal amount of Debentures and 2,820,000 Warrants. Assuming Dundee fully  converted  the principal of the Debentures at  the minimum conversion price of $0.30  and  fully exercised its Warrants at $0.30  per Warrant, and assuming there was  no  restriction on conversion and exercise  as discussed above, Dundee would  hold  24,511,146 Shares  representing  approximately  26.25% of  the  issued  Shares  (calculated on a partially diluted basis).  West Face  subscribed for  a  total of  1,880  units comprised  of  $1,880,000  principal amount of  Debentures and  1,880,000 Warrants.  Assuming West  Face  fully converted  the  principal  amount  of  the  Debentures  at  the  minimum  conversion price  of $0.30  and  fully exercised  its  Warrants at  $0.30  per  Warrant, West  Face would  hold 16,718,119  Shares representing  approximately  18.72% of the issued Shares (calculated on a partially diluted basis).  The Private Placement was  unanimously approved by the  board of directors  of  the Company (the"Board"), excluding two directors  who, as a result of  their  position with  the  participating insiders,  declared  their interest  in  the  Private Placement and abstained  from voting. The  Board has determined  that  the fair market value of the consideration for, and the subject matter of, the Private Placement, as it relates to  the participation by related parties,  is  less than  25%  of  the Company's  market  capitalization.  Accordingly,  the  Company is  exempt from  the  requirement to  obtain  a formal  valuation  and  minority shareholder approval for the Private Placement. The Company did  not  file a material change  report at least  21 days prior to  the closing of  the  Private Placement because  the participation of,  and subscription  agreements  with, participating insiders was not  known or entered into until  immediately  prior to closing.  The Private Placement remains  subject to final acceptance  by the TSXV.  The  Debentures and Warrants (and the Shares which may be issuable pursuant to  the  conversion and  exercise thereof)  are subject  to a  four month  hold  period  ending August 11, 2014.  All monetary  amounts  referred to  in  this  press release  are  to  Canadian  dollars.  About Longreach  Longreach is an  independent oil and  gas company focused  on its  significant  land position in Morocco. The Company has a 50% operated interest in the Sidi Moktar license area covering  2,683 square kilometres  and is working  closely  with ONHYM  as  a  committed  long-term  partner  to  unlock  the  hydrocarbon  potential of the region. Morocco  offers a politically stable environment  to  work within and has  extremely favourable fiscal  terms to energy  producers.  Longreach is a  public company listed  on the TSX  Venture Exchange under  the  symbol "LOI".  Additional   information    about    the    Company   can    be    found    at  www.longreachoilandgas.com  and   under  the   Company's  SEDAR   profile   at  www.sedar.com.  About West Face Capital Inc.  West Face  Capital Inc.  is  one of  Canada's leading  alternative  investment  managers combining control-through-distressed, high-yield, negotiated finance, proactive equity, and private equity activities. West Face's capabilities are underpinned by  a  seasoned multi-disciplinary  investment  team,  proprietary  origination channels,  deep  sector  expertise, and  the  ability  to  address  investment targets in domestic and international markets.  Special Note Regarding Forward Looking Statements  This press  release  contains forward-looking  statements.  These  statements  relate to future events or  the Company's future performance. All  statements  other than  statements of  historical  fact are  forward-looking  statements.  Forward-looking statements are often, but not always, identified by the use of words  such  as  "may",  "will",  "should",  "expect",  "plan",  "anticipate",  "believe",  "estimate",   "predict",  "project",   "potential",   "targeting",  "intend", "could", "might", "continue" or the negative of these terms or other similar terms. Forward-looking statements in this press release include,  but  are not limited to, statements regarding the potential future equity  offering  by the Company for the purpose  of repaying or refinancing the Debentures,  as  well as  the continued  development  of the  Company's projects  in  Morocco.  Forward-looking statements are  only predictions. Forward-looking  statements  involve known  and unknown  risks, uncertainties  and other  factors that  may  cause actual results or events to differ materially from those anticipated  in  such forward-looking statements. Some  of the risks  and other factors  which  could  cause  results  to  differ  materially  from  those  expressed  in  the  forward-looking statements contained  in this press  release include, but  are  not limited to: general economic conditions in Canada, the Kingdom of  Morocco  and globally; industry conditions, including fluctuations in the price of  oil  and gas,  governmental  regulation of  the  oil and  gas  industry,  including  environmental regulation; fluctuation in  foreign exchange or interest  rates;  risks  inherent  in  oil  and   gas  operations;  political  risk,   including  geological,  technical,  drilling   and  processing  problems;   unanticipated  operating events which could cause commencement of drilling and production  to  be delayed; the need to obtain consents and approvals from industry  partners,  regulatory authorities and  other third-parties; stock  market volatility  and  market valuations; competition for, among other things, capital,  acquisitions  of reserves, undeveloped land and skilled personnel; incorrect assessments  of  the value  of acquisitions  or  resource estimates;  any future  inability  to  obtain additional  funding, when  required,  on acceptable  terms or  at  all;  credit  risk;   changes  in   legislation;  any   unanticipated  disputes   or  deficiencies related  to  title  matters; dependence  on  management  and  key  personnel; and risks associated  with operating in and  being part of a  joint  venture. Although  the forward-looking  statements  contained in  this  press  release are based upon assumptions which management of the Company believes to be  reasonable,  the  Company  cannot  assure  that  actual  results  will  be  consistent with  its  expectations  and  assumptions.  Material  factors  and  assumptions which management of the Company has considered in connection  with  making the forward-looking statements in  this press release include that  the  Company will be  able to raise  adequate proceeds and  refinance or repay  the  Debentures on terms acceptable to the  Company. Undue reliance should not  be  placed on the  forward-looking statements  contained in this  news release  as  there can be  no assurance  that the  plans, intentions  or expectations  upon  which they are based will occur. These  statements speak only as of the  date  of this press release,  and the Company does  not undertake any obligation  to  publicly update or revise any  forward-looking statements except as  expressly  required by applicable securities laws.  Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term  is  defined   in  policies   of  the  TSX   Venture  Exchange)   accepts  responsibility for the adequacy or accuracy of this release.  SOURCE Longreach Oil and Gas Limited  Contact:  Martin Arch Chief Financial Officer and Secretary Tel: +44 203 137 7756 march@longreachoilandgas.com