CALGARY, AB–(Marketwired – December 06, 2016) – Marquee Energy Ltd. (formerly Alberta Oilsands Inc.) (“New Marquee“) (TSX VENTURE: MQX) today announced the completion of the previously announced acquisition of Marquee Energy Ltd. (“Old Marquee“) (TSX VENTURE: MQL) by Alberta Oilsands Inc. (“AOS“) (TSX VENTURE: AOS) by way of a plan of arrangement (the “Arrangement“) and the subsequent completion of the short-form vertical amalgamation to form New Marquee. Pursuant to the Arrangement, holders of common shares of Old Marquee received 1.67 common shares of AOS for each common share of Old Marquee. As a result, Old Marquee shareholders and AOS shareholders own approximately 49% and 51%, respectively, of the issued and outstanding common shares of New Marquee (on a non-diluted basis).
As of the close of trading on December 7, 2016, common shares of Old Marquee will be delisted from the TSX Venture Exchange (“TSXV“) and will cease trading on the TSXV under the symbol “MQL” and common shares of AOS will cease trading on the TSXV under the symbol “AOS”. The common shares of New Marquee are expected to commence trading on the TSXV under the symbol “MQX” at the commencement of trading on December 8, 2016.
“We are pleased to announce the completion of the Arrangement, which creates a well-capitalized company positioned to create long-term value for all shareholders,” said Richard Thompson, President & Chief Executive Officer of New Marquee. “We are excited to move forward to deliver a number of compelling strategic and financial benefits for our shareholders. On behalf of the Board of Directors, we thank the AOS senior management team for their hard work and commitment in facilitating the successful completion of this transaction. I am confident that New Marquee is well positioned for growth and success.”
Shareholders whose common shares of Old Marquee are held by a broker or other intermediary (or an agent or nominee thereof) should contact their broker or other intermediary in respect of the exchange of their common shares of Old Marquee pursuant to the Arrangement. Registered holders of common shares of Old Marquee must deposit their certificates with a duly completed letter of transmittal in order to receive their common shares of New Marquee, as set forth in the management information circular (the “Circular“) of Old Marquee dated August 23, 2016. Certificates formerly representing common shares of Old Marquee now represent only the right to receive common shares of New Marquee to which the holders thereof are entitled pursuant to the Arrangement.
NEW MARQUEE FINANCIAL AND OPERATING ATTRIBUTES
New Marquee has a strong balance sheet and is well positioned to focus on the development of its top tier light oil resource play in South East Alberta at Michichi, with the following operational attributes:
- 370 million barrels of discovered petroleum initially in place (based on the Sproule Associates Limited contingent resources report in respect of Old Marquee as of December 31, 2015, prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101);
- Over 300 multi-zone horizontal development drilling locations targeting the Detrital/Banff reservoirs have been identified through extensive 2D and 3D seismic, vertical well control (1,300 vertical wells) and offsetting horizontal wells drilled in the Michichi area;
- Based on management’s current understanding of well performance and drainage, the identified locations represent downspacing of four to six drilling locations per section of New Marquee’s land base across the light oil fairway at Michichi;
- Costs to drill, complete, equip, and tie-in a new horizontal well have continued to decrease with current estimated expenditures of $1.7 MM that are expected to result in a payout of 1.2 years and a rate of return in excess of 80% based on December 2, 2016 strip price forecast. Michichi finding and development costs average approximately $10/boe, which ranks in the top quartile relative to competing resource plays in Canada;
- Control and operatorship of two gas plants and an oil battery, as well as an extensive gathering system and field compression provide opportunities for timely tie-in of new production. New Marquee moves its sales products through the Interprovincial Oil pipeline and TransCanada pipeline and has no current or anticipated take-away capacity issues; and
- Approval has been received from the Alberta Energy Regulator to initiate a waterflood pilot in order to enhance recovery. Reservoir modeling suggests an increase in hydrocarbon recovery through water flooding of the Banff reservoir.
New Marquee’s pro-forma operational and financial profile at the closing of the Arrangement is as follows:
|Common Shares Outstanding||Approximately419.2 million|
|Current Production(1)||~2,500boe/d (48% oil & NGLS)|
|Net Debt||$18 million|
|Drilling Locations(2)||300+ horizontal locations at Michichi|
|Tax Pools||Approximately $220 million|
1. Based on Marquee’s average monthly October through November 2016 field estimates.
2. Based on internally identified locations. See “Drilling Locations” below.
Concurrent with the closing of the Arrangement, New Marquee entered into a credit agreement with two Canadian Chartered Banks providing for credit facilities of up to an aggregate of $30 million, with approximately $18 million of net debt. New Marquee expects to have the liquidity to act upon organic and strategic opportunities within its core area.
The Board of Directors of New Marquee plan to meet in December to formulate the strategy and direction for the company to initiate a capital program in Q1 2017 that may incorporate a mix of development drilling and low cost recompletions and workovers. Details on 2017 guidance will be provided in Q1 2017.
MANAGEMENT AND BOARD OF DIRECTORS OF NEW MARQUEE
New Marquee will be led by the Old Marquee management team, including the following executives who will serve as officers of New Marquee:
- Richard Thompson – President and Chief Executive Officer
- Dan Toews – Vice President, Finance and Chief Financial Officer
- Dave Washenfelder – Vice President, Exploration
- Rob Lemermeyer – Vice President, Production
- Sam Yip – Vice President, Engineering
- Steve Bradford – Vice President, Land
The Board of Directors of New Marquee is composed of seven directors, including three former directors of Old Marquee and three former directors of AOS, with William J. F. Roach serving as Chair, and Adrian H. Goodisman, Stephen J. Griggs, Paul Moase, Leonard J. Sokolow, Richard Thompson and Robert J. Waters also serving as directors.
ABOUT NEW MARQUEE
New Marquee is a Calgary based, junior energy company focused on high rate of return light oil development and production. New Marquee is committed to growing the company through exploitation of existing opportunities and continued consolidation within its core area at Michichi. New Marquee’s shares will begin trading on the TSX Venture Exchange under the trading symbol “MQX” at the commencement of trading on December 8, 2016. Additional information about New Marquee may be found on its website www.marquee-energy.com and in its continuous disclosure documents filed with Canadian securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.