CALGARY, Alberta – Crew Energy Inc. (TSX: CR; OTCQB: CWEGF) (“Crew” or the “Company“), a growth-oriented natural gas weighted producer operating exclusively in the world-class Montney play in northeast British Columbia (“NE BC”), announced today that we have successfully completed the sale of certain non-core assets at Attachie and Portage in NE BC for gross proceeds of $130 million (subject to certain customary closing adjustments) (the “Disposition”). The net proceeds from the Disposition will be used to redeem $128 million principal amount of the Company’s 6.500% senior unsecured notes due 2024 (the “2024 Notes“), of which an aggregate principal amount of $300 million is currently outstanding.
Details of the Disposition
The Disposition includes approximately 47,025 net acres of Montney rights on land north of the Peace River with no associated production or facilities, total proved reserves of 4.7 million boe1, representing 2.3% of total corporate proved reserves, with associated future development capital of $25.7 million, and total proved plus probable reserves of 34.2 million boe1, representing 8.5% of total corporate proved plus probable reserves, with associated future development capital of $182.9 million.
With completion of the Disposition, Crew has successfully monetized a non-core portion of our asset base to focus on production growth in the Greater Septimus and Groundbirch areas. In concert with the strong Adjusted Funds Flow2 (“AFF”) and Free AFF3 realized to date in 2022, the proceeds from this transaction will further contribute to our financial flexibility and form the basis for development of an updated strategic plan that builds on the momentum realized over the past 24 months.
Partial Redemption of 2024 Notes
In connection with the receipt of the Disposition proceeds, Crew today issued a notice of partial redemption for $128 million principal amount of its outstanding 2024 Notes (the “Redeemed Notes”) at a redemption price of CDN $1,010.40 for each $1,000.00 of principal amount redeemed, plus accrued and unpaid interest up to, but not including, the redemption date of September 19, 2022.
In addition to benefitting from improvements in our overall cost of debt, as a result of this partial redemption, we have also strengthened the balance sheet and helped position Crew for long-term sustainability. The Company is currently undrawn on its $185 million credit facility and will continue to assess options to refinance the remaining balance of the 2024 Notes over the coming quarters in advance of the March 2024 maturity date.
TD Securities Inc. acted as financial advisor to Crew in respect of the Disposition and TD Securities Inc. and National Bank Financial acted as co-financial advisors to Crew in respect of the partial redemption of 2024 Notes.
1 Reflects “gross” reserves assigned by the Company’s independent reserves evaluator, Sproule Associates Limited, in their evaluation made effective December 31, 2021 (the “Sproule Report”) prepared in accordance with the definitions and provisions contained in the COGE Handbook. Complete details of the Sproule Report are contained within Crew’s most recent Annual Information Form filed on SEDAR.
2 Capital management measure that does not have any standardized meaning as prescribed by International Financial Reporting Standards, and therefore, may not be comparable with the calculations of similar measures for other entities. See “Advisories – Non-IFRS and Other Financial Measures” contained within our most recently filed MD&A, available on SEDAR at www.sedar.com.
3 Non-IFRS financial measure or ratio that does not have any standardized meaning as prescribed by International Financial Reporting Standards, and therefore, may not be comparable with calculations of similar measures or ratios for other entities. See “Advisories – Non-IFRS and Other Financial Measures” contained within our most recently filed MD&A, available on SEDAR at www.sedar.com.