Winstar Announces Initiation of Strategic Alternatives Process and Provides an Operational Update
CALGARY, July 3, 2012 /CNW/ - Winstar Resources Ltd. ("Winstar" or the "Company") (TSX: WIX) reports that it has retained FirstEnergy Capital LLP ("FirstEnergy") to initiate a process to explore and evaluate potential strategic alternatives with a view to enhancing shareholder value.
FirstEnergy, as financial advisor to the Board, will assist in the process of analyzing and evaluating prospects and options to the Company which may include a strategic investment, cash infusion, joint venture, merger, sale or other alternatives. The Company has not set a timetable for the completion of the review process and it does not intend to comment further regarding the review process unless a specific transaction is approved by the Board of Directors, the review process is concluded or it is otherwise determined that further disclosure is necessary.
Winstar is scheduled to release its Q2 2012 financial and operating results in mid August 2012. Preliminary production estimates indicate that Q2 2012 results will be between 1,100 and 1,300 boepd, notwithstanding current well deliverability of 2,400 to 2,600 boepd.
Lower production from Tunisian operations is the result of mechanical issues with our natural gas purchaser and labour unrest at our operating properties in Southern Tunisia. Gas sales have recently resumed but at less than stable rates and lower nominations than realized during Q1 2012. Third party compression and gas processing mechanical issues are expected to be partially resolved within the near term and fully resolved by November 2012.
During Q2 2012, Winstar had been impacted by labour unrest at its three Southern Tunisian Concessions; namely Sanrhar, Chouech Essaida and Ech Chouech. During that period the company's production in Southern Tunisia was shut-in for a period of eleven days. The effect of the strikes and resulting shut-ins was the temporary elimination of over 1,200 boepd of production and, subsequent to the recommencement of operations, decreased performance at several Triassic oil wells. The decreased performance of several Triassic oil wells has temporarily eliminated 400 to 500 boepd which is expected to be remedied over the next few weeks. The Company is pleased to announce that it has successfully negotiated a definitive agreement with its regional staff and relevant unions and no further labour disputes or production disruptions are expected.
Winstar's 2012 Tunisian capital program will remain intact as previously reported, however it is expected that the program which was expected to commence in June, will now be delayed until July or August 2012. In Romania, the Company is finalizing its plans to conduct an 80 square kilometer seismic acquisition program in August and September over its recent gas discovery at Moftinu.
References herein to boe mean barrels of oil equivalent derived by converting gas to oil in the ratio of 6,000 cubic feet (mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based upon an energy conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.
This press release contains certain forward-looking statements. These statements relate to future events or future performance of the Company. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "predict", "seek", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company's current views with respect to certain events, and are subject to a number of risks, uncertainties and assumptions. Many factors could cause Winstar's actual results, performance, or achievements to materially differ from those described in this press release. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in other public disclosures made by the Company or this press release as intended, planned, anticipated, believed, estimated, or expected. Specific forward-looking statements in this press release include, among others, statements pertaining to the following: factors upon which Winstar will decide whether or not to undertake a specific course of action; and estimated volumes and timing of future production; business plans for drilling, exploration and development; and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. The risks to which the Company is subject include those of the oil and gas industry in general, including operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas fields and deposits; volatility in global market prices for oil and natural gas; general economic conditions; competition; liabilities and risks, including environmental liability and risks inherent in oil and gas operations; uncertainties as to the availability and cost of financing and changes in capital markets; alternatives to and changing demand for petroleum products; and changes in legislation and the regulatory environment, including uncertainties with respect to the Kyoto Protocol.
Furthermore, statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions that the resources and reserves described can be produced profitably in the future. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary declaration. These statements speak only as of the date of this press release. The Company does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
Winstar Resources Ltd. is a Calgary-based junior oil and gas Company, which explores for, develops, produces and sells crude oil, natural gas liquids and natural gas in Tunisia and conducts exploration activities in Romania. Winstar's common shares trade on The Toronto Stock Exchange under the symbol WIX.
Effective June 1, 2012 Winstar's Calgary headquarters are located at 3130, 520 - 3rd Avenue SW, T2P 0R3.
For further information:
Mr. Charles de Mestral
Chief Executive Officer
Phone: +41 22 361 14 45
Mr. David Monachello
Phone: +1 403 513 4200
E-mail : firstname.lastname@example.org
Mr. Jerrad Blanchard
Chief Financial Officer
Phone : +1 403 513 4204
E-mail : email@example.com
FirstEnergy - London
Mr. Majid Shafiq
Managing Director, Corporate Finance
Phone: +44 207 448 0226
Mr. Mark Llamas
Managing Director, Acquisitions & Divestitures
Phone: +44 207 448 0224
FirstEnergy - Calgary
Mr. Nicholas Johnson
Managing Director, Corporate Finance
Phone: +1 403 262 0617
Mr. Robyn Hemminger
Director, Corporate Finance
Phone: +1 403 262 0665