Calgary – Briko Energy Corp. (“Briko” or the “Corporation”) is pleased to announce that it has executed a purchase and sale agreement (“PSA”) to acquire complementary Cardium oil and natural gas assets in the Alberta foothills (the “Complementary Assets”) with an effective date of November 1, 2019. In addition to executing the PSA, Briko is also pleased to announce that it has entered into a $1.5 million credit agreement with Tallinn Capital Energy Corp. (“Tallinn”).
The Complementary Assets include established reserves, production, infrastructure and land holdings jointly with and adjacent to Briko’s existing foothills assets. In addition to an increased asset and production base, the acquisition of the Complementary Assets expands Briko’s development drilling inventory in its Cardium light oil focused Stolberg area providing for future reserve and production growth.
Closing of the acquisition of the Complementary Assets is expected to occur in the first quarter of 2020 and is subject to satisfaction of customary closing conditions, including receipt of applicable regulatory approvals.
Key Acquisition Highlights
- Cash consideration of $1.8 million, subject to customary adjustments;
- Current average daily production on the Complementary Assets of approximately 425 BOE/d based on field estimates;
- Increases Briko’s Foothills acreage by 35,000 net acres to approximately 250,000 net acres;
- Increases Briko’s anticipated 2020 annual average daily production to be in the range of 850 – 950 BOE/d; and
- Pro-forma adjusted funds flow for 2020 is expected to be in excess of $1.2 million ($0.11 per share) based on production estimates and current 2020 strip commodity prices.
Credit Facility Financing
In conjunction with the acquisition of the Complementary Assets, Tallinn is providing a senior secured credit facility (the “Credit Facility”) of $1.5 million that matures on September 30, 2021. Principal reductions on the Credit Facility of $60,000 per month will commence on February 28, 2020 with the remainder of the principal due on the maturity date. The Credit Facility is also subject to customary financial covenants and security requirements.
About Briko Energy Corp.
Briko Energy Corp. is an Alberta Foothills Cardium light oil focused company with undeveloped land, crude oil and natural gas reserves and a production base with associated infrastructure. Corporate information can be found at: www.brikoenergy.com.