CALGARY, May 25, 2016 /CNW/ – (TSX:PMT) – Perpetual Energy Inc. (“Perpetual”, the “Corporation” or the “Company”) is pleased to announce the closing of the disposition of its 30 percent partnership interest in Warwick Gas Storage LP (“WGS LP”) for $20 million. The transaction included the disposition of Perpetual’s share of WGS LP’s $8.3 million of debt net of working capital held by the partnership. In addition, Perpetual received a net dividend of $0.5 million at closing, for effective total value of approximately $23 million.
Perpetual is also pleased to announce that it has swapped an additional $62.5 million aggregate principal amount of senior notes pursuant to the previously announced securities swap proposal whereby Perpetual offered to swap a portion of the Tourmaline Oil Corp. shares (the “Tourmaline Shares“) owned by Perpetual (the “Securities Swap Proposal“) on the basis of 21 Tourmaline Shares for each $1,000 principal amount of the 8.75% senior notes due March 15, 2018 (the “2018 Senior Notes“) and 20 Tourmaline Shares for each $1,000 principal amount of the 8.75% senior notes due July 23, 2019 (the “2019 Senior Notes” and together with the 2018 Senior Notes, the “Senior Notes“). The additional $62.5 million Senior Notes swapped include $35.4 million of the 2018 Senior Notes and $27.2 million of the 2019 Senior Notes for 1,286,006 Tourmaline Shares owned by Perpetual.
In combination with $152.0 million aggregate principal amount of Senior Notes previously swapped pursuant to Securities Swap Proposal on April 27 and May 10, 2016, an aggregate of $214.4 million Senior Notes have been swapped for 4.402 million Tourmaline Shares owned by Perpetual. This includes $114.1 million of the 2018 Senior Notes and $100.3 million of the 2019 Senior Notes. All Senior Notes tendered to the Securities Swap Proposal were swapped and subsequently cancelled.
Giving effect to the aggregate $214.4 million swap and cancellation of Senior Notes, the Company estimates its total net debt, net of the market value of the remaining Tourmaline Shares held is approximately $29.5 million, down close to 86 percent from $203.6 million at year end 2015. The current estimate of total net debt is comprised of: $60.6 million in face value Senior Notes ($36.1 million 2018 Senior Notes and $24.5 million 2019 Senior Notes); $21.3 million due November 16, 2016 as per the financing arrangement secured by 1.0 million Tourmaline Shares; a margin loan of $10.6 million secured by the remaining 0.85 million Tourmaline Shares due April 2017; offset by estimated net working capital of $5.0 million and by the market value of the remaining 1.85 million Tourmaline Shares of approximately $58.0 million (based on a market price of $31.38 per Tourmaline Share on May 25, 2016).
Perpetual remains focused on strengthening its balance sheet, managing liquidity and restoring positive funds flow as top priorities in the current depressed commodity price environment.