CALGARY, ALBERTA–(Marketwired – June 9, 2014) – Arcan Resources Ltd. (TSX VENTURE:ARN) (“Arcan” or the “Corporation”) has reached an agreement to amend its credit facility following an annual review by the Corporation’s syndicate of lenders, led by Alberta Treasury Branches and including National Bank of Canada, Bank of Nova Scotia, Canadian Imperial Bank of Commerce and Royal Bank of Canada. Arcan’s total credit commitment has been reduced from $190 million to $180 million and will continue to revolve until May 28, 2015.
Under the amended terms, Arcan’s credit facility matures on May 28, 2015, unless the Corporation and its syndicate of lenders agree to an amendment, renewal or extension of the credit facility. The credit facility’s borrowing base was determined to be $180 million based on Arcan’s reserves report for the period ended December 31, 2013. The credit facility is comprised of a $170 million syndicated revolving credit facility and a $10 million non-syndicated revolving operating credit facility. The $180 million borrowing base is subject to a review by the syndicate on or before October 31, 2014. As of June 6, 2014, Arcan had a total of $155.0 million drawn on the credit facilities, and is compliant with its covenants thereunder.
Arcan continues to advance its core objective of delivering sustainable and profitable production funded by funds from operations, while maintaining a strong focus on production optimization, cost management and capital efficiency. The Corporation plans lower capital investments during the second and third quarters of 2014, when access to the Swan Hills area is limited due to soft ground conditions, that are expected to provide positive cash flow to help reduce debt. The credit facility is expected to provide Arcan with financial flexibility to execute its 2014 capital program.
ANNUAL AND SPECIAL GENERAL MEETING
Arcan’s annual and special meeting is scheduled for June 24, 2014, at 3:00 p.m. in the McMurray Room of the Petroleum Club, located at 319 – 5th Avenue SW, Calgary, Alberta.
About Arcan Resources Ltd.
Arcan Resources Ltd. is an Alberta, Canada corporation that is principally engaged in the exploration, development and acquisition of petroleum and natural gas located in the Western Canada Sedimentary Basin.
Additional information about the Corporation, including the Corporation’s financial statements, management discussion and analysis, and annual information form for the year ended December 31, 2013, is available under Arcan’s profile on SEDAR at www.sedar.com.
Forward-Looking Information and Statements
This press release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words “will”, “plans”, “continue”, “expect” and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this press release contains forward-looking information and statements pertaining to, among other things, the following: Arcan’s credit facility and the maturity date, expected benefits and repayment terms thereof, the Corporation’s business plans and objectives including its plans for capital spending and the ability of the credit facility to provide Arcan with the ability to execute its 2014 capital program.
The forward-looking information and statements contained in this press release reflect several material factors and expectations and assumptions of Arcan including, without limitation: that Arcan will continue to conduct its operations in a manner consistent with past operations; the accuracy of current horizontal production data, historical well production and waterflood recovery results; the general continuance of current or, where applicable, assumed industry conditions; continuity of reservoir conditions across Arcan’s Swan Hills land base; availability of debt and/or equity sources to fund Arcan’s capital and operating requirements as needed; the continuance of existing and, in certain circumstances, proposed tax and royalty regimes; the accuracy of the estimates of Arcan’s reserve volumes; and certain commodity price and other cost assumptions.
Arcan believes the material factors, expectations and assumptions reflected in the forward-looking information and statements are reasonable at this time but no assurance can be given that these factors, expectations and assumptions will prove to be correct. The forward-looking information and statements included in this press release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: for reasons currently unanticipated, Arcan’s production rates may not increase in the manner currently expected; the application and modification of horizontal, multi-stage fracture technologies including the application of additional fracture stimulation stages may not have the impact currently anticipated by Arcan; Arcan’s capital spending and operational plans for 2014 may not be completed in the timelines anticipated, in the manner anticipated or at all and the execution of such plans may not have the results currently anticipated by Arcan; water injection may not have the impact on production currently anticipated by Arcan; StimSol Canada Inc. may not impact Arcan’s business and operations in the manner currently anticipated or at all; changes in commodity prices; unanticipated operating results or production declines; waterflood impacts; Arcan may be unable to solve its mechanical/operational issues in the timelines anticipated, in the manner anticipated or at all; shareholder value may not be maximized in the manner suggested by Arcan or at all; changes in tax or environmental laws or royalty rates; increased debt levels or debt service requirements; inaccurate estimation of Arcan’s oil and gas reserves volumes; limited, unfavourable or no access to debt or equity capital markets; Arcan’s objectives; and Arcan’s budget and the expected cash flows resulting therefrom; inaccuracies in Arcan’s calculation of reserve life index; for reasons currently unforeseen, the current drilling locations identified by Arcan may prove to be unsuitable or unavailable and drilling on the locations identified may not occur; increased costs and expenses; the impact of competitors; reliance on industry partners; reviews of Arcan’s credit facility and/or budget may not occur on the timelines anticipated or at all; an amendment, renewal or extension may not be considered by Arcan’s lenders on terms acceptable to Arcan or at all; and certain other risks detailed from time to time in Arcan’s public disclosure documents including, without limitation, those risks identified in this press release, and in Arcan’s annual information form, copies of which are available on Arcan’s SEDAR profile at www.sedar.com.
The forward-looking information and statements contained in this press release speak only as of the date of this press release, and Arcan does not assume any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.
Neither 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.
Chief Executive Officer
firstname.lastname@example.orgArcan Resources Ltd.
Suite 2200, 500 – 4th Avenue S.W.
Calgary, AB T2P 0H7
Telephone (403) 262-0321