Toscana Energy Income Corporation completes $20.0 million acquisition

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CALGARY, Feb. 11, 2014 /CNW/ - Toscana Energy Income Corporation ("Toscana" or the "Corporation") (TSX: TEI) is pleased to announce that it has closed an acquisition of long life high quality crude oil assets that produce approximately 210BOE/d (the "Assets").  The Assets are located in northwestern Alberta and management for Toscana has identified upside with respect to the Assets, primarily from waterflood maximization and infill drilling opportunities.  The aggregate purchase price for the Assets was $20.0 million.  The Corporation's existing credit facilities were utilized to finance the acquisition.  Other key attributes of the Assets acquired include:

  • Significant oil in place;
  • Proven acquisition cost of $20.30/BOE based on an independent engineering report prepared in accordance with National Instrument 51-101 and effective December 31, 2012 (the "Report") which includes future development costs over the reserve base;
  • Proved plus probable acquisitions costs of $17.30/BOE based on the Report;
  • Run rate acquisition costs of 4.5 times; and
  • Recycle ratio on a proved plus probable basis of 3.4 times based on the Report.

The acquisition of the Assets has an effective date of January 1, 2014.  It is expected that the Assets will increase corporate production to approximately 2,800 BOEs/d.

About Toscana Energy Income Corporation

Toscana Energy Income Corporation is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets including royalties, non-operated working interests and unitized production for yield and capital appreciation.  Toscana Energy Income Corporation is managed by Sprott Toscana through Toscana Energy Corporation.  Sprott Toscana is a member of the Sprott Group of Companies.

About Sprott Toscana

Sprott Toscana (formerly Toscana Merchant Group) is a team of Calgary-based energy specialists that manage three separate businesses: Toscana Energy Income Corporation (through Toscana Energy Corporation), Toscana Financial Income Trust and Maple Leaf Energy Income LPs. In July 2012, Toscana Merchant Group joined the Sprott Group of Companies when it was acquired by Sprott Inc. (TSX: SII), Canada's leading alternative asset manager and a global leader in resource investing.

Forward-Looking Statements

This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance.  All statements other than statements of historical fact may be forward‐looking statements or information.  Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. 

More particularly and without limitation, this news release contains forward‐looking statements and information concerning the expected results of the acquisition; the Corporation's petroleum and natural gas production with respect to the Assets and the Corporation's petroleum and natural gas production on an aggregate basis. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of Toscana, including expectations and assumptions concerning well production rates and reserve volumes in respect of the Assets; expectations and assumptions concerning well production rates in respect of existing wells; project development and overall business strategy. Although management of Toscana believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Corporation relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forward‐looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.

The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Toronto Stock Exchange.  The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement

BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

SOURCE Toscana Energy Income Corporation

For further information:

For further information, please visit our website at www.sprott-toscana.com or contact:

Joseph S. Durante, Chief Executive Officer
Tel: (403) 410-6793
Fax: (403) 444-0090
E-Mail: jdurante@toscanacapital.com