CALGARY, AB – Altura Energy Inc. (“Altura” or the “Corporation”) (TSXV: ATU) is pleased to announce the closing of the final stage of the asset disposition, an operational update and renewal of its credit facilities.
ASSET DISPOSITION
As disclosed in the Corporation’s January 29, 2021 news release, Altura amended the payment schedule of the second transaction in the December 4, 2019 definitive agreement with a private company. On June 15, 2021, Altura closed the fourth and final stage of the disposition with the sale of a 1.375% working interest in the Corporation’s production, wells, lands and facilities for cash of $875,000. The disposition schedule for all transactions net of transaction costs is as follows:
Disposition |
Closing Dates |
Status |
Disposition Interest |
Cash Proceeds |
|
First Transaction |
December 4, 2019 |
Closed |
7.0000% |
$3,508,000 |
|
Second Transaction |
|||||
Stage 1 |
June 30, 2020 |
Closed |
1.3750% |
$871,000 |
|
Stage 2 |
September 30, 2020 |
Closed |
1.3750% |
$875,000 |
|
Stage 3a |
January 29, 2021 |
Closed |
0.6875% |
$437,500 |
|
Stage 3b |
April 27, 2021 |
Closed |
0.6875% |
$437,500 |
|
Stage 4 |
June 15, 2021 |
Closed |
1.3750% |
$875,000 |
|
Total |
12.5000% |
$7,004,000 |
|||
The cash proceeds from the asset sales strengthen the Corporation’s financial position and flexibility to continue development of the Rex pool at Leduc-Woodbend.
OPERATIONAL UPDATE
The 102/16-14-049-26W4 Rex horizontal well (“16-14”) that was completed in February 2021 continues with strong production performance exceeding management’s expectations. The 16-14 well was completed with 74 fracs which is a 35% increase in fracs compared to earlier wells with 55 fracs. This innovative completion design is an exciting optimization that is proving to be a game changing advancement for future wells at Leduc-Woodbend. Altura’s updated corporate presentation available on its website (www.alturaenergy.ca) illustrates the significantly improved production performance and well economics resulting from this well design advancement.
Altura is planning to drill one well mid-July and a second well in September at Leduc-Woodbend. Altura will continue to improve upon its extended reach horizontal well design by increasing the lateral length in the first well from 2,000 to 2,300 meters (a 15% increase). This extension will again increase the total number of fracs for the well from 74 to 85. The wells are scheduled to commence production in August and October 2021, respectively.
Previous success with longer horizontal laterals and increased frac stages in the Rex pool illustrates improved production rates and reserve capture. The optimization of longer lateral length is expected to result in even greater well performance and reduce the number of required wells and capital required to develop the remainder of the Rex pool.
CREDIT FACILITIES RENEWAL
In June, Altura and its lender completed the redetermination of its revolving operating demand loan (the “Operating Loan”) and the term loan (the “Term Loan”) collectively the (“Credit Facilities”). The Operating Loan was redetermined to $4.0 million and no amendments were made to the $3.0 million Term Loan providing Altura with $7.0 million of total Credit Facilities. The next review date for the Credit Facilities has been scheduled for May 31, 2022.
The interest rate on the Credit Facilities was decreased by 1.0% to the Lender’s prime rate plus 3.5% per annum which is approximately 5.95%, down from 6.95%. In addition, the hedging covenant was amended from 30% of forecasted production based on the proved developed producing reserves to 350 bbl/d of WCS oil and 1,000 GJ/d of natural gas (AECO) for no less than the succeeding nine-month period, on a rolling basis.
With forecasted net debt of $1.9 million at June 30, 2021 and $7.0 million of total Credit Facilities, the Corporation has the balance sheet strength to resume drilling the newly designed high impact Leduc-Woodbend wells which are expected to grow production and cash flow in H2 2021.
ABOUT ALTURA ENERGY INC.
Altura is a junior oil and gas exploration, development and production company with operations in central Alberta. Altura predominantly produces from the Rex member in the Upper Mannville group and is focused on delivering per share growth and attractive shareholder returns through a combination of organic growth and strategic acquisitions.