CALGARY, ALBERTA–(Marketwired – Oct. 24, 2013) – Anderson Energy Ltd. (“Anderson” or the “Company”) (TSX:AXL) announced today that it has closed the previously disclosed sale of its Garrington and Ferrier Cardium oil and natural gas properties. Proceeds from this transaction were used to repay bank debt. After normal closing adjustments and transaction fees, net proceeds were approximately $78 million and current cash deposits are approximately $24 million.
With this sale, the Company’s existing bank agreement will be terminated. The Company has agreed to the terms of a new bank facility of $28 million, subject to customary conditions and documentation.
The Company initiated the strategic review process in February 2012 and with the completion of this disposition, the Company has:
As a result, the Board of Directors has concluded the strategic alternatives review process and the Company will be commencing a light oil horizontal oil development program in the Company’s Willesden Green field. The Company will finance the 2014 drilling program with cash flow and available cash and credit facilities. The Company’s remaining drilling inventory in the Cardium formation is 139 gross (85 net) drilling locations. Pro forma the disposition, current production is approximately 2,200 BOED (22% oil and NGL). The Company currently has a fixed price swap contract for 500 barrels per day of oil at $90.63 WTI Canadian per barrel for November and December 2013.
A seven gross well Cardium horizontal light oil drilling program is planned to commence this November, with all seven wells planned to be on production by the second quarter of 2014. The Company estimates it will spend approximately $33 million in field capital expenditures from now to the end of 2014, with approximately 90% being spent on the drilling, completion and well tie-in of approximately 11 net Cardium wells. Based on this drilling program, the Company currently estimates 2014 production will be approximately 2,600 BOED (33% oil & NGL). The Company will update its plan for 2014 at the end of the first quarter and provide updated 2014 capital and production guidance at that time.
For further information, we encourage investors to visit the Company’s website at www.andersonenergy.ca.
FORWARD-LOOKING STATEMENTS
Certain statements in this news release including, without limitation, management’s assessment of future plans and operations; benefits and valuation of the development prospects described herein; the estimated proceeds from the sale of assets, available cash deposits, total net debt and credit facilities; number of locations in drilling inventory and wells to be drilled, timing and location of drilling and tie-in of wells and cost thereof; expected production rates and percentage of production from oil and natural gas liquids; dates of commencement of production and amount of capital expenditures and timing and method of financing thereof; and general economic outlook may constitute “forward-looking information” (within the meaning of applicable securities legislation) and necessarily involve risks and assumptions made by management of the Company including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodity prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; adequate weather to conduct operations; sufficiency of budgeted capital, operating and other costs to carry out planned activities; wells not performing as expected; delays resulting from or inability to obtain required regulatory approvals; changes to government regulation; inability to access sufficient capital from internal and external sources; and other factors, many of which are beyond the Company’s control. The impact of any one risk, uncertainty or factor on a particular forward-looking statement is not determinable with certainty as the factors are interdependent, and management’s future course of action would depend on its assessment of all information at the time. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and readers should not place undue reliance on the assumptions and forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Anderson’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at Anderson’s website (www.andersonenergy.ca).
The forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
CONVERSION
Disclosure provided herein in respect of barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 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.