CALGARY, May 15, 2014 /CNW Telbec/ - Exall Energy Corporation ("Exall"
or the "Company") (TSX:EE and TSX:EE.DB) is pleased to announce its new
banking arrangements subject to the completion of a disposition of 18%
of Exall's working interest in the Marten Mountain, Alberta area.
Exall's filings can all be found at www.exall.com or www.sedar.com.
A stepped down Revolving Production Loan Facility of $21.0 million, as
of May 30, 2014, with a Canadian financial institution at the financial
institution's prime lending rate plus 220 basis points.
A $1.0 million dollar Term Loan Facility as of May 30, 2014 with a
Canadian financial institution at the financial institution's prime
lending rate plus 300 basis points, with payments of $83,333.33 monthly
commencing June 30, 2014.
The disposition of 18% of Exall's working interest in certain lands for
$14.0 million, to fund the reductions to the Revolving Production Loan
Facility to be completed on May 30, 2014:
Representing an approximate cost of $73,684.21 per flowing barrel of oil
Representing an approximate cost of $36.25 per December 31, 2014 Total
Representing an approximate cost of $21.77 per December 31, 2014 Total
Proven + Probable boe.
Effective May 14, 2014 Exall signed an extension of its current $36.0
million loan facility to May 30, 2014 and an Indicative Term Sheet with
its current Canadian debt facility provider ("Lender") for facilities
through to April 30, 2015. Under the terms of Indicative Term Sheet
Exall, as of May 30, 2014, will have its current Revolving Production
Loan Facility reduced from $36.0 million to a Production Loan Facility
of $21.0 million and a Term Loan Facility of $1.0 million.
The Revolving Production Loan Facility will be subject to an interest
rate of the then Lender's Prime Rate plus 220 basis points. The Term
Loan Facility will be subject to an interest rate of the then Lender's
Prime Rate plus 300 basis points, and will be subject to principle
payments of $83,333.33 per month commencing June 30, 2014.
The Indicative Term Sheet is subject to the confirmation of the closing
on May 30, 2014 of the Purchase and Sale Agreement ("PSA") Exall
entered into with a private company ("Purchaser") for proceeds of $14.0
million. The closing net proceeds are to be applied to the Lender's
debt, thus reducing the credit facilities held to a Production Loan
Facility of $21.0 million and a Term Loan Facility of $1.0 million on
May 30, 2014.
Exall's current debt as at March 31, 2014 was approximately $59.0
million which included a conforming $26.0 million Revolving Production
Loan Facility and a non-conforming $10.0 million Revolving Production
Loan Facility held with the Company's Lender that bore interest at the
Lender's base prime rate plus 3.00 percent. The balance of the debt is
a $23.0 million Convertible Debenture with a maturity date of March 31,
2017 that pays an annual interest rate of 7.75%.
Marten Mountain "Gilwood" Asset Disposition
Effective May 9, 2014 Exall signed the Purchase and Sale Agreement
("PSA") with the Purchaser for the disposition of 18% of Exall's
working interest in and to the Petroleum and Natural Gas Rights,
Tangibles and Miscellaneous Interests in certain lands held by Exall in
the Marten Mountain area of Alberta. Completion of the transaction
under the PSA is a condition of the new banking arrangements.
The gross Purchase Price for 18% of Exall's working interest is $14.0
million and will be paid at closing occurring on May 30, 2014. The
total Purchase Price of $14.0 million translates to an approximate cost
of $73,684.21 per flowing boe, $36.25 per total proved boe reserve and
$21.77 per total proved plus probable boe reserve based on the Exall
December 31, 2013 third party engineering report.
The PSA contains a provision for an Adjustment to the Purchase Price
should Exall not meet certain annual production targets. Each of Fiscal
2014, 2015 and 2016 will see a reduction of $10,000 per flowing boe
below the target rates (190 boe/d, 225 boe/d and 250 boe/d
respectively) to a maximum Purchase Price adjustment of $1.0 million.
Exall is a junior oil and gas company active in its business of oil and
gas exploration, development and production from its properties in
Alberta. Exall Energy is currently developing the new Mitsue area
"Marten Mountain" discovery in north-central Alberta.
Exall Energy currently has 66,634,854 common shares outstanding. The
Company's common shares are listed on the Toronto Stock Exchange under
the trading symbol EE. The Company's convertible debentures are listed
on the Toronto Stock Exchange under the trading symbol EE.DB.
This news release contains forward-looking statements, which are subject
to certain risks, uncertainties and assumptions, including those
relating to results of operations and financial condition, capital
spending, financing sources, commodity prices and costs of production.
By their nature, forward-looking statements are subject to numerous
risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, actual results may differ
materially from those predicted. A number of factors could cause actual
results to differ materially from the results discussed in such
statements, and there is no assurance that actual results will be
consistent with them. Such factors include fluctuating commodity
prices, capital spending and costs of production, and other factors
described in the Company's most recent Annual Information Form under
the heading "Risk Factors" which has been filed electronically by means
of the System for Electronic Document Analysis and Retrieval ("SEDAR")
located at www.sedar.com. Such forward-looking statements are made as at the date of this news
release, and the Company assumes no obligation to update or revise
them, either publicly or otherwise, to reflect new events, information
or circumstances, except as may be required under applicable securities
For the purposes of calculating unit costs, natural gas has been
converted to a barrel of oil equivalent (boe) using 6,000 cubic feet
equal to one barrel (6:1), unless otherwise stated. The boe conversion
ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion
method and does not represent a value equivalency; therefore boe may be
misleading if used in isolation. This conversion conforms to the
Canadian Securities Regulators' National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities.
SOURCE EXALL ENERGY CORPORATION