of Alberta on the same date. All requisite approvals from governmental entities in the People’s Republic of China have also been obtained.
Completion of the Arrangement remains subject to certain approvals set forth in the Arrangement Agreement, including approval of a simple majority of votes cast by shareholders of Yanchang Petroleum International at a meeting that will be called to, among other things, consider the Arrangement, which is expected to be held in December, 2013. In addition, the Arrangement is conditional upon Yanchang Petroleum International finalizing financing arrangements.
NON-IFRS FINANCIAL MEASUREMENTS
Included in this press release are references to certain financial measures commonly used in the oil and natural gas industry, such as funds flow from operations, operating netbacks and net debt. These measures have no standardized meanings, are not defined by International Financial Reporting Standards (“IFRS”), and accordingly are referred to as non-IFRS measures. The determination of these measures may not be comparable to the same as reported by other companies and should not be considered an alternative to, or more meaningful than, cash provided by operating, investing and financing activities or net income as determined by IFRS as an indicator of the Company’s performance or liquidity.
The Company considers funds flow from operations to be a key measure as it demonstrates the Company’s ability to generate the cash necessary to repay debt and to fund future growth through capital investment. Novus determines funds flow from operations as cash provided by operating activities prior to changes in non-cash working capital items and decommissioning expenditures.
Operating netbacks are used by management to assess operating results between periods and between peer companies as they provide an indication of results generated by the Company’s principal business activities before the consideration of how these activities are financed or how the results are taxed. Operating netbacks are calculated by taking production revenue and deducting royalties, field operations, transportation and marketing expenses and realized losses (gains) on financial instruments.
The Company monitors net debt as part of its capital structure. Net debt is calculated as current assets less current liabilities, but excluding the fair value of financial instruments.
OTHER MEASUREMENTS
Reported production represents Novus’ ownership share of sales before the deduction of royalties. Where amounts are expressed on a barrel of oil equivalent (“boe”) basis, natural gas has been converted at a ratio of six thousand cubic feet to one boe. Boe’s may be misleading, particularly if used in isolation. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalent of 6:1, utilizing a value conversion of 6:1 may be misleading. References to natural gas liquids (“liquids”) include condensate, propane, butane and ethane and one barrel of liquids is considered to be equivalent to one boe.
Novus Energy Inc. is a well positioned, junior oil and gas company with a proven management team committed to aggressive, cost-effective growth of high netback light oil reserves and production. Novus will continue to grow through a targeted acquisition and consolidation strategy coupled with development and exploration drilling.
Novus’ common shares trade on the TSX Venture Exchange under the symbol NVS. Novus currently has approximately 189.4 million common shares outstanding.
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.
This news release will not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration, or an applicable exemption therefrom.
ADVISORY REGARDING FORWARD LOOKING STATEMENTS
Certain disclosures set forth in this press release constitute forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “anticipate”, “believes”, “budget”, “continue”, “could”, “estimate”, “forecast”, “intends”, “may”, “plan”, “predicts”, “projects”, “should”, “will” and other similar expressions. All estimates and statements that describe the Company’s future, goals, or objectives, including Management’s assessment of future plans and operations, may constitute forward-looking information under securities laws. In particular, but without limiting the foregoing, this press release contains forward-looking statements pertaining to the following: expected production volumes; future drilling programs; the results from our drilling program and the timing of related production; operating costs; capital spending levels and its impact on our production levels; and the proposed Arrangement.
Forward-looking statements involve known and unknown risks and uncertainties which include, but are not limited to: exploration, development and production risks; assessments of acquisitions; reserve measurements; availability of drilling equipment; access restrictions; permits and licenses; aboriginal claims; title defects; commodity prices; commodity markets; transportation and marketing of crude oil, liquids and natural gas; reliance on operators and key personnel; competition; corporate matters; funding requirements; access to credit and capital markets; market volatility; cost inflation; foreign exchanges rates; general economic and industry conditions; environmental risks; government regulation and taxation; and failure by the Company to complete the Arrangement at all or on terms and within a timeframe acceptable to the Company.
Forward-looking statements relate to future events and/or performance and although considered reasonable by Novus at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated in the statements made. Novus does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Novus operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), and at Novus’ website (www.novusenergy.ca). The forward-looking statements and information contained in this press release are made as of the date hereof and Novus 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.
SOURCE Novus Energy Inc.
For further information:
NOVUS ENERGY INC.
Hugh G. Ross
President and CEO
(403) 218-8895
Ketan Panchmatia
Chief Financial Officer
(403) 218-8876
Julian Din
VP Business Development
(403) 218-8896