CALGARY, ALBERTA–(Marketwired – Oct. 17, 2016) – Craft Oil (“Craft”) is pleased to announce it has entered into a Purchase and Sale Agreement dated September 30, 2016 to sell certain properties located in the Province of Alberta with approximately 1,934 boepd (68% gas) for gross proceeds of $13.5 million. Proceeds to be received are comprised of $9.0 million cash and $4.5 million of tradeable debentures. The transaction is expected to close on or about October 27, 2016.
The transaction has the following benefits to Craft:
- Reduces estimated net debt
- Increases Craft projected Liability Management Rating (“LMR”) to greater than 2.0 by year end
- Focuses Craft’s asset base to one core area and two non-core areas
Upon closing of the transaction, Craft will have the following characteristics:
- Production of 2,400 boepd (69% gas)
- 83% of production focused in Craft’s Grand Prairie, Alberta core area
- Net debt of less than $6.0 Million (excluding tradeable debentures mentioned above)
- Estimated 2017 cash flow of $5.3 million(1)
- Common Shares outstanding of 217,502,790 basic (253,252,790 fully diluted)
The transaction was executed as part of a plan to reduce the number of non-core properties and to focus the Company on its Core area of Grand Prairie, Alberta. Management looks forward to updating its shareholders as it progresses through its business plan.
- Based on a flat oil price forecast of WTI $US 52.10/bbl and a flat gas price forecast of AECO $CDN 2.56/GJ.
About Craft Oil Ltd.
Craft is a private oil and gas exploration and development corporation with operations in Alberta, Canada and is a 70% owned subsidiary of Chinook Energy Inc. Craft was formed as part of a transaction between Chinook Energy and Tournament Exploration whereby Alberta assets of Chinook were placed into Tournament and a new team led by Trevor Spagrud was hired to develop and execute a go forward plan.