CALGARY, Alberta, Aug. 17, 2016 (GLOBE NEWSWIRE) — Toscana Energy Income Corporation (“TEI” or the “Corporation”) (TSX:TEI) is pleased to announce that it has sold its non-operated oil and natural gas interests in northwestern Alberta (the “Assets“) for total cash consideration of $12.5 million ($82,237 / flowing barrel) subject to customary closing adjustments. The disposition of the Assets has an effective date of July 1, 2016 and is expected to close on or about September 15, 2016.
In the second quarter of 2016, production from the Assets averaged approximately 152 bbl/d (100% light oil), which comprised 6% of the Corporation’s total production.
The opportunity to sell this property was unsolicited, but given the offer, the Corporation will utilize the opportunity to strengthen its balance sheet and consolidate its focus.
The cash proceeds to be received from the disposition of the Assets will initially be used to reduce the amount owing under the Corporation’s revolving credit facility to approximately $27 million and subsequently to be redirected towards the Corporation’s operated large oil in place EOR projects at Carmangay, Clair and Weyburn.
As the disposition of the Assets related to non-operated interests, it will not have any impact on the Corporation’s liability management ratio (LMR) which remains at 2.9.
Management uses “netback”, “Funds flow from operations, prior to performance fee internalization” and “funds flow from operations” to analyze operating performance and to determine the Corporation’s ability to fund future capital investment. These terms, as presented, do not have any standardized meaning prescribed by International Financial Reporting Standards (“IFRS”) and therefore may not be comparable with the calculation of similar measures for other entities.
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as “appear”, “seek”, “anticipate”, “plan”, “continue”, “estimate”, “approximate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe”, “would” and similar expressions.
More particularly and without limitation, this news release contains forward‐looking statements and information concerning the anticipated closing date of the disposition of the Assets, the use of proceeds from the disposition of the Assets. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Corporation, including expectations and assumptions concerning applicable post-closing adjustments in relation to the disposition; production of the Corporation’s oil and natural gas interests in the Assets; and general business, economic and market conditions. Although management of the Corporation believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Corporation relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risk that the disposition of the Assets will not be completed on the terms anticipated or at all; general business, economic and market conditions; the risks associated with the oil and gas industry in general; incorrect assessment of the value of the disposition and failure to realize the anticipated benefits of the disposition of the Assets; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given 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 or the Toronto Stock Exchange (“TSX”). The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
About Toscana Energy Income Corporation
Toscana Energy Income Corporation is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets including royalties, non-operated working interests and unitized production for yield and capital appreciation. Toscana Energy Income Corporation is managed by Sprott Toscana through Toscana Energy Corporation. Sprott Toscana is a member of the Sprott Group of Companies.
For further information, please visit our website at www.sprott-toscana.com or contact:
Joseph S. Durante, Chief Executive Officer
Tel: (403) 410-6793
Fax: (403) 444-0090