CALGARY, Alberta, Aug. 11, 2016 (GLOBE NEWSWIRE) — Quattro Exploration And Production Ltd. (TSXV:QXP) (“Quattro” or the “Company“) announced today an increase in its divestiture plan to $30,000,000 including its previously announced asset sale of $24,250,000 and has filed a Notice of Intention to Make a Proposal (“Notice of Intention”) under the provisions of Part III of the Bankruptcy and Insolvency Act (the “BIA”). The notice was filed by the Company in order to allow it the necessary time to complete the previously announced asset sale and the sale of additional non-core assets that are currently in process, protecting Quattro and its assets from the claims of creditors and others while the Company pursues these objectives.
The Company is also pleased to announce that it is evaluating a number of financing proposals that are complementary to its current lender’s continued funding of the Quattro’s business plan.
Pursuant to the Notice of Intention, Hardie and Kelly Inc. has been appointed as the trustee in the Company’s proposal proceedings and will assist the Company in these efforts.
The decision to file the Notice of Intention was made by Quattro’s board of directors following aggressive actions by certain of the Company’s trade creditors that have been limiting the Company’s ability to execute its business plan in an orderly manner.
A Notice of Intention permits the Company to pursue the restructuring of its financial affairs through an orderly and formal proposal process. The filing of the Notice of Intention has the effect of imposing an automatic stay of proceedings (“Stay”) that will protect the Company and its assets from the claims of creditors and others. The initial Stay period of 30 days can be extended by court order, during which time the Company will be presenting its proposal to its creditors.
The increased divestiture value anticipated to be realized is based on the sale of non-core shut-in assets in the region in addition to the Alberta assets previously disclosed. Therefore, as reported on August 2, 2016, based on Quattro’s independent 2015 year end reserve report, the oil and gas assets being sold represent 40% of Quattro’s reserves and 35% of the Company’s lands, averaging approximately 750 boe/d and were assigned total proven reserves (1P) estimated at 2.68 million boe, valued at $22.5 million, within a land base of 212,997 acres (gross) or 147,576(net) acres (the “Properties”).
The conclusion of this process is anticipated to provide Quattro the ability to address all of its obligations to its creditors and materially improve Quattro’s working capital upon the completion of its divestiture plan. The Company’s divestiture plan is to reduce the Company’s liabilities by up to $18 million and increase its working capital to more than $12 million.
About Quattro Exploration and Production Ltd.
Quattro Exploration and Production Ltd. (“QXP”) continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, with an expanding presence in Alberta and BC. Our core low risk production base will provide us the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.