CALGARY, Alberta – (PIPE – TSX) Pipestone Energy Corp. (“Pipestone” or the “Company”) is pleased to announce the Toronto Stock Exchange (the “TSX”) has accepted the notice filed by the Company to implement a normal course issuer bid (the “NCIB”).
The NCIB allows Pipestone to purchase up to 9,598,347 common shares (“Common Shares”), representing 5% of its 191,966,942 outstanding Common Shares as at November 12, 2021. The NCIB is scheduled to commence on November 25, 2021 and is due to expire no later than November 24, 2022. Under the NCIB, Common Shares may be repurchased in open market transactions on the TSX and other alternative trading platforms in Canada and in accordance with the rules of the TSX governing NCIB’s.
The total number of Common Shares Pipestone is permitted to purchase is subject to a daily purchase limit of 55,099 Common Shares, representing 25% of the average trading volume of 220,397 Common Shares on the TSX calculated for the six-month period ended October 31, 2021; however, Pipestone may make one block purchase per calendar week which exceeds the daily repurchase restrictions. Any Common Shares that are purchased under the NCIB will be cancelled upon their purchase by the Company.
Pipestone intends to fund the purchases out of its available resources and is implementing the NCIB as part of its free cash flow allocation strategy. Pipestone believes that, at times, the prevailing share price may not reflect the underlying value of the Common Shares and the repurchase of Common Shares represents an opportunity to improve per share metrics as part of the Company’s commitment to shareholder returns. The Company plans on repurchasing Common Shares under the NCIB following its commencement date.
The Company intends to enter into an automatic securities purchase plan effective November 25, 2021, under which its broker may purchase Common Shares in connection with the NCIB. The plan will contain a prearranged set of criteria in accordance with which its broker may make Common Share purchases. These strict parameters enable the purchase of Common Shares during times when it would ordinarily not be permitted due to self-imposed blackout periods, insider trading rules or otherwise. Such plan is adopted in accordance with applicable Canadian securities laws. Outside of blackout periods, Common Shares may be purchased under the NCIB in accordance with management’s discretion.
Pipestone Energy Corp.
Pipestone is an oil and gas exploration and production company focused on developing its large contiguous and condensate-rich Montney asset base in the Pipestone area near Grande Prairie. Pipestone is fully funded to grow its production from 25 Mboe/d in 2021 to 35 Mboe/d (midpoint) in 2022, while generating significant free cash flow and de-leveraging the business. Pipestone is committed to building long term value for our shareholders while maintaining the highest possible environmental and operating standards, as well as being an active and contributing member to the communities in which it operates. Pipestone shares trade under the symbol PIPE on the TSX. For more information, visit www.pipestonecorp.com.
Pipestone Energy Contacts:
Paul Wanklyn President and Chief Executive Officer (587) 392-8407 paul.wanklyn@pipestonecorp.com |
Craig Nieboer Chief Financial Officer (587) 392-8408 craig.nieboer@pipestonecorp.com |
Dan van Kessel VP Corporate Development (587) 392-8414 dan.vankessel@pipestonecorp.com |
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Non-GAAP measures
This press release includes references to financial measures commonly used in the oil and natural gas industry. The term “free cash flow” is not defined under IFRS, which has been incorporated into Canadian GAAP, as set out in Part 1 of the Chartered Professional Accountants Canada Handbook – Accounting, is not separately defined under GAAP, and may not be comparable with similar measures presented by other companies.
Management believes the presentation of the non-GAAP measures provide useful information to investors and shareholders as the measures provide increased transparency and the opportunity to better analyze and compare performance against prior periods.
Free cash flow
“Free cash flow” is a non-GAAP measure that is calculated as cash from operating activities plus changes in non-cash working capital and decommissioning provision costs incurred, less capital expenditures incurred, and is not defined under IFRS. Free cash flow should not be considered an alternative to, or more meaningful than, cash from operating activities, income (loss) or other measures determined in accordance with IFRS as an indicator of the Company’s performance. Management uses free cash flow to analyze operating performance and leverage and believes it is a useful supplemental measure as it provides an indication of the funds generated by Pipestone’s principal business activities, inclusive of ongoing capital expenditures, prior to consideration of changes in working capital.