CALGARY, Aug. 28, 2018 /CNW/ – (TSX: EGL): Eagle is pleased to announce it has closed the sale of its entire interest in the oil and natural gas properties near Twining, Alberta to a third party for cash consideration of $CA 13.82 million before customary post-closing adjustments (the “Sale“).
As planned, Eagle has used $US 8.1 million of the net proceeds from the Sale to reduce its outstanding long term debt to $US 30.4 million and intends to use the remaining net proceeds to further fund its North Texas development program.
Since the end of 2017, Eagle has reduced its debt by 48% (from $US 58.2 million to $US 30.4 million) which will result in lower interest charges. Eagle also expects its corporate netback per barrel of oil equivalent (“boe“) will rise and its corporate decline rate will fall as a result of the Sale.
Commenting on the Sale closing and North Texas development program, Wayne Wisniewski, President and Chief Executive Officer, stated, “Eagle continues to execute its previously announced plan to reduce debt and corporate costs, including interest costs, in order to better position Eagle to capitalize the North Texas development program. We are pleased to report that we have started drilling our third North Texas horizontal well at a location approximately one mile from our initial horizontal well, which is a well that continues to exceed production expectations.”
The following are the transaction metrics associated with the Sale:(4)
Percentage of Production that is Liquids: |
65%(1) |
Production Metric: |
$CA 27,400/boe/d(2) |
Field Netback Multiple: |
4.2x(3) |
Notes: |
|
(1) |
Based on the July 2018 working interest average daily production of crude oil and natural gas liquids for the Twining assets. |
(2) |
This metric has been calculated by dividing the July 2018 working interest average daily production of 505 boe/d for the Twining assets into the $CA 13.82 million sale price. |
(3) |
This metric has been calculated by dividing twice the second half forecast 2018 field netback of $1.65 million for the Twining assets into the $CA 13.82 million sale price. Field netback is calculated as revenue less royalties less operating expenses. |
(4) |
These metrics are non-IFRS financial measures. See “Advisories – Non-IFRS Financial Measures”. |
About Eagle Energy Inc.
Eagle is an oil and gas corporation with shares listed for trading on the Toronto Stock Exchange under the symbol “EGL”.