CALGARY, ALBERTA–(Marketwired – Dec. 11, 2015) –
Pine Cliff Energy Ltd. (“Pine Cliff” or the “Company“) (TSX VENTURE:PNE) is pleased to announce that its previously announced acquisition of certain natural gas weighted assets (the “Assets“) in the Viking area of Central Alberta and Ghost Pine area of Central Alberta for cash consideration of $185 million, prior to any adjustments and rights of first refusal (the “Acquisition“), has now closed.
The production of the Assets is currently approximately 11,300 barrels of oil equivalent (“Boe“) per day or 67,800 thousand cubic feet equivalent (“Mcfe“) per day, weighted 89% to natural gas, 7% to oil and 4% to natural gas liquids. With the close of the Acquisition, Pine Cliff is currently producing approximately 23,800 Boe per day or 142,800 Mcfe per day, weighted 92% to natural gas.
In connection with the Acquisition, the Company issued 63.9 million subscription receipts (“the “Subscription Receipts”) at a price of $1.08 per Subscription Receipt for gross proceeds of $69 million by way of a short form prospectus offering on a bought deal basis (the “Offering”). All of the Subscription Receipts issued pursuant to the Offering have been exchanged for common shares of Pine Cliff (“Common Shares“) on a one for one basis as of today’s date. The net proceeds of the Offering have been released from escrow and were used to pay a portion of the purchase price of the Acquisition, as was the $3 million of proceeds from the previously announced private placement of Common Shares to officers, directors, employees and consultants of the Company at $1.08 per share. Holders of Subscription Receipts are not required to take any action in order to receive Common Shares.
Credit Facility Increase
Additionally, Pine Cliff is pleased to announce that its credit facility has been amended to reflect an increase in the borrowing base to $185 million and the addition of two additional Canadian Financial Institutions for a total of five Canadian Financial Institutions in the syndicate. The credit facility consists of a $165 million syndicated revolving term credit facility and a $20 million revolving operating facility (the “Syndicated Facility“). Some of the proceeds of the Syndicated Facility were used to pay a portion of the purchase price of the Acquisition. As of today’s date, $156 million was drawn on the facility and the Company is forecasting at 2015 year end to have $ 155 million drawn on the facility and net debt to be $146 million.
TSX Listing Application
Pine Cliff is also pleased to announce that it has applied to be listed on the Toronto Stock Exchange (the “TSX“). The Company provides no guarantee that it will be listed on the TSX, or if it is listed, how long the application process will be.
2016 Guidance and Outlook
Pine Cliff’s Board of Directors has approved a $10 million capital budget for 2016, which may be modified depending on commodity prices and non-operated drilling activity. Pine Cliff will continue to focus on balance sheet strength and its 2016 cash flow is currently expected to be materially higher than its capital budget, based on current strip pricing. At current commodity prices, the corporate break-even point has been lowered to less than $2.00 per thousand cubic feet.
Based on the proposed capital budget, Pine Cliff is forecasting 2016 production volumes to range from 22,500 – 23,000 Boe per day, weighted approximately 92% to natural gas.
Pine Cliff will continue to seek additional opportunities to enhance our shareholders’ long term value by acquiring low decline natural gas assets with long-life reserves and low operating costs.