Calgary, Alberta – Kelt Exploration Ltd. (TSX: KEL) (“Kelt” or the “Company”) is pleased to announce that all matters presented for approval at the Annual Meeting of Shareholders held on April 22, 2020 have been fully authorized and approved. A total of 114,994,030 common shares, representing 61.23% of the common shares issued and outstanding, were represented in person or by proxy at the meeting. A brief description of the matters voted upon and the outcome of the votes is set forth below.
Fixing Number of Directors
By vote by way of a show of hands, an ordinary resolution to approve fixing the number of directors to be elected at the meeting at six (6), was approved.
Election of Directors
All of the nominees proposed as directors of the Company were duly elected as directors of the Company with votes cast by the shareholders present in person or represented by proxy at the meeting by way of a ballot, as follows:
|Robert J. Dales||Elected||109,006,635||95.95||4,598,629||4.05|
|Geraldine L. Greenall||Elected||113,228,909||99.67||376,355||0.33|
|William C. Guinan||Elected||111,373,747||98.04||2,231,517||1.96|
|Michael R. Shea||Elected||105,828,797||93.15||7,776,467||6.85|
|Neil G. Sinclair||Elected||109,009,635||95.95||4,595,629||4.05|
|David J. Wilson||Elected||113,578,220||99.98||27,044||0.02|
Appointment of Auditor
By vote by way of a show of hands, an ordinary resolution to approve the appointment of PricewaterhouseCoopers LLP, as the auditors of the Company, was approved.
Kelt is providing a corporate update in response to the current market conditions resulting from the COVID-19 pandemic and decreased commodity prices.
Kelt’s highest priority remains the health and safety of its employees, partners and the communities where it operates. The Company has introduced measures to protect the well-being of these stakeholders and is proud of the dedication of its workforce to maintain safe operations and business continuity in a challenging environment.
The unprecedented impact to global oil demand destruction resulting from the COVID-19 pandemic, as well as excess oil supplies, as many oil producing nations sought to gain global market share, has resulted in a collapse in crude oil prices around the world. Many regions around the world may be facing the prospect of negative oil prices in the near term as access to physical storage facilities becomes unavailable.
Further to previously announced capital expenditure reductions and cost-cutting measures, Kelt continues to preserve shareholder value in the following manner:
- In addition to the Company’s existing hedge book, Kelt has entered into new hedge contracts by fixing the sales price of Edmonton MSW light oil for the six month period from July 1, 2020 to December 31, 2020 on 3,000 barrels per day at an average fixed price of CA$31.36 per barrel (the implied underlying indices were: US$33.40 per barrel for WTI oil, US$11.00 per barrel for the WTI-MSW differential and CA$1.40 for the CAD/USD exchange rate);
- Kelt is taking measures to reduce production levels to protect against selling oil at negative margins and to preserve value;
- Kelt expects to apply for the Federal Government’s Canada Emergency Wage Subsidy (CEWS) whereby as a Canadian employer whose business has been affected by COVID-19, the Company would be eligible for a subsidy of 75% of employee wages (up to a maximum of $847 per employee per week) for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020;
- Kelt has obtained approval from its lenders to extend the revolving period under its credit facility agreement from April 30, 2020 to May 31, 2020 with respect to determining the borrowing base available under its revolving borrowing base line; and
- Kelt expects to pursue additional opportunities to access credit support during this uncertain economic environment created by the COVID-19 crisis that is being offered by the Government of Canada, though the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) as announced by the Government on April 17, 2020.
As a result of the significant ongoing uncertainty in market conditions, Kelt is withdrawing its 2020 corporate guidance previously provided in the Company’s news release on March 17, 2020 and in its management’s discussion and analysis for the year ended December 31, 2019 dated March 9, 2020. In this regard, the Company currently has no immediate plans to start up drilling and completion operations on wells that currently remain in the capital expenditure budget until there is better clarity on future commodity prices which have been negatively impacted by global oil demand destruction as a result of the COVID-19 pandemic.
Kelt will continue to reassess its ability to reasonably estimate and provide annual guidance and plans to continue to provide corporate updates during this period of heightened volatility and uncertainty.
Kelt is an oil and gas company based in Calgary, Alberta focused on the exploration, development and production of crude oil and natural gas resources in Western Canada.