NP Newswire -
Release date- 31052014 -
The Acquisition is highly accretive and includes Proved and Probable ('2P') reserves of 6,513 mboe at
In connection with the Acquisition,
The Acquisition provides
Pro forma the Acquisition,
Total purchase price of
Acquiring adjusted 2P reserves of 6,513 mboe at approximately
Acquisition cost per flowing boe of approximately
Reserve life index of 5.41 years, based on current estimated production and adjusted 2P reserves;
Recycle ratio of approximately 2.1x, based on Q1-2014 operating property netbacks of
Key producing infrastructure, including batteries and pipelines;
Approximately 890,000 net acres of developed and undeveloped lands and
Lands have an average working interest of approximately 83%, and the net production acquired is more than 94% operated.
Rationale for the Acquisition
Highly accretive on all metrics and more than triples the Company's production base.
Strong cash flow from the conventional asset bases that can be directed towards accelerating development of
Enhances and improves the Company's flexibility regarding the future delineation of or transactions associated with,
In respect to the benefits of the proposed transactions Mr.
The combination of achieving critical mass in
I look forward to having the
In connection with the Acquisition,
The Underwriters have also been granted an over-allotment option, exercisable at any time up to 30 days following closing of the Financing, in whole or in part, to purchase from the Company, up to an additional 13,636,500
The gross proceeds from the Financing will be held in escrow pending the satisfaction of all conditions to the completion of the Acquisition (other than funding), provided that the closing date of the Acquisition is on or before
If the Acquisition is not completed on or before
Completion of the Acquisition and the Financing are subject to certain conditions including the receipt of all necessary regulatory approvals, including the approval of the
The Company is also implementing horizontal drilling and completions technology to high impact international plays and is currently focused on a conventional oil play in the Sierras Blancas formation.
President and Chief Executive Officer
Tel: (403) 262-1901
Finance and Chief Financial Officer
Tel: (403) 262-1901
Forward Looking Information
The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance, in particular, but not limited to, with respect to the Acquisition, including the characteristics of the Argentinean business units being acquired and other expectations related thereto and the timing thereof, the Financing and the timing thereof and the Company's expected use of proceeds from the Financing.
Statements relating to 'reserves' are also deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future.
All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as 'seek', 'anticipate', 'plan', 'continue', 'estimate', 'approximate', 'expect', 'may', 'will', 'project', 'predict', 'potential', 'targeting', 'intend', 'could', 'might', 'should', 'believe', 'would' and similar expressions.
In particular, this news release contains forward-looking statements pertaining to operational activities to be conducted by the Company.
These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves and obtaining required approvals of regulatory authorities.
The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.
The forward looking statements in this news release are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward looking statements. Investors are encouraged to review and consider the additional risk factors set forth in the Company's Annual Information Form, which is available on SEDAR at www.sedar.com.
Information Regarding Disclosure on Reserves
The reserve estimates contained herein are estimates only and there is no guarantee that the estimated reserves will be recovered. In relation to the disclosure of estimates for individual properties, companies or business units, as adjusted, such estimates may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.
Meaning of Boe
The term 'boe' or barrels of oil equivalent may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Additionally, given that the value ratio based on the current price of crude oil, as compared to natural gas, is significantly different from the energy equivalency of 6:1; utilizing a conversion ratio of 6:1 may be misleading as an indication of value.
Finding and Development Costs
NI 51-101 specifies how finding and development costs ('F&D costs') should be calculated if they are reported. Essentially NI 51-101 requires that the exploration and development costs incurred in the year along with the change in estimated F&D costs be aggregated and then divided by the applicable reserve additions. The calculation specifically excludes the effects of acquisitions and dispositions on both reserves and costs. Since acquisitions can have a significant impact on annual reserve replacement costs, excluding these amounts could result in an inaccurate portrayal of
F&D costs disclosed herein are based on working interest gross reserves. The aggregate of the exploration and development costs incurred in the most recent financial year and the change during that year in estimated future development costs generally will not reflect total F&D costs related to reserve additions for that year.
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