Year to date, the Company has disposed of 210 boe/d of non-core assets for gross proceeds of approximately $32.4 million, equating to approximately $154,000/boe/d, with the proceeds used to reduce debt and fund the Company's on-going capital program.
Macquarie Capital Markets Canada Ltd. and TD Securities Inc. acted as joint financial advisors to Renegade on the asset disposition.
2013 PRODUCTION GUIDANCE AND OPERATIONAL UPDATE
Renegade is pleased to confirm its previously announced 2013 production guidance of 7,400 to 7,700 boe/d, after giving effect to the aforementioned asset dispositions.
Renegade's pro forma current net debt as of the date hereof is approximately $276 million, comprised of $268 million of bank debt drawn on its $335 million credit facility and $8 million of working capital deficiency.
During the second quarter of 2013, Renegade drilled a total of 3 gross (1.8 net) wells in southeast Saskatchewan. The first well was drilled at Crystal Hills and has been on production for approximately 10 days and has a current rate of approximately 200 boe/d. The remaining two wells were drilled in the Queensdale area on the assets acquired by the Company in December, 2012 and are in the process of being tied into the Company's infrastructure.
Renegade currently has two drilling rigs active; one rig in southeast Saskatchewan and a second actively drilling in the Viking play in west central Saskatchewan.
STRATEGIC REVIEW PROCESS ON-GOING
The strategic review process is ongoing and the Special Committee will provide further updates as appropriate.
This news release contains forward-looking information and forward-looking statements within the meaning of applicable securities laws. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade.
Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Renegade's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com and Renegade's other public disclosure documents which have been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made as of the date hereof and Renegade undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and will depend on the board of directors' assessment of Renegade's outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant at such future time. The amount of future cash dividends, if any, may also vary depending on a variety of factors, including fluctuations in commodity prices and differentials, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates.
Oil and Gas Matters
The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one boe (6 mcf/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. All boe conversions in this report are derived from converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. 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 on a 6:1 basis may be misleading as an indication of value.
Any references in this news release to initial or early production rates are useful in confirming the presence of hydrocarbons, however, such rates are not determinative of the rates at which such wells will continue production and decline thereafter and are not necessarily indicative of long term performance or ultimate recovery. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for Renegade.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Renegade Petroleum Ltd.
President & CEO
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