Proceeds of $35 Million on Second Closing
Concurrent with this second closing, Crew has received an additional $35 million of cash consideration in exchange for the disposition of another 11% net working interest (“WI“) in our Septimus and West Septimus gas processing facilities located within Crew’s northeast B.C. (“NEBC“) Montney operations at Greater Septimus (the “NEBC Facilities“). Under the Transaction, Crew’s total WI divestment in the NEBC Facilities equaled 22%, generating combined proceeds of $70 million received in two phases. Further, Crew has entered into a long-term processing arrangement with the purchaser, under which the Company is expected to make annual payments of approximately $6.36 million to the purchaser over a 20-year period. In conjunction with the Transaction, Crew and the midstream company plan to build on their strategic infrastructure alliance with the goal of collaborating on future value creation opportunities.
Unrelated to the Transaction, Crew also exercised and recently closed upon an option with a different third party to acquire a net WI of approximately 16% in the NEBC Facilities for $11.7 million. As a result of this additional transaction, Crew is expected to save approximately $5.9 million of annual processing fees on a go-forward basis.
Based on the two transactions described above, the Company realizes meaningful benefits, including:
- receipt of net cash proceeds totaling $58.3 million;
- retention of an approximate 23% net WI in, and operatorship of, the NEBC Facilities;
- net effect of annual cost reductions of approximately $3 million; and
- a remaining option to dispose of an additional 11.43% WI in the NEBC Facilities for additional proceeds of up to $37.5 million exercisable between January 2021 and June 2023.
Crew is a growth-oriented oil and natural gas producer, committed to pursuing sustainable per share growth and long term value creation through development of its Montney resource located in northeast British Columbia. Crew’s common shares are listed for trading on the Toronto Stock Exchange (“TSX“) under the symbol “CR”.