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CALGARY, Sept. 24 /CNW/ - Cequence Energy Ltd. ("Cequence" or the "Company") (TSX: "CQE") is pleased to announce that it has closed its previously announced acquisitions of oil and gas producing properties and related assets. Including a purchase price reduction, the aggregate purchase price is $17.25 million in cash, relative to the originally announced $19.0 million purchase price. The final purchase price is also subject to normal purchase price adjustments.
Current production from the acquired properties is approximately 850 boe/d (90% natural gas). At the time of the August 18, 2009 announcement of the property acquisitions, Cequence had anticipated declines from a significant well ("Well") and had factored these into its announced 850 boe/d property acquisition and pro forma guidance. Prior to the closing of the acquisitions, the Well began producing more water than expected and Cequence was able to negotiate a $1.75 million reduction to the purchase price as a result.
The properties acquired by the Company are concentrated in the Peace River Arch area of northwest Alberta and include 31,000 net acres of undeveloped land, various facility and pipeline working interests with the majority of production being operated. The acquisitions were financed through Cequence's existing working capital. Pro forma the acquisitions, Cequence has approximately $13 million in positive working capital, excluding the cash held within its subsidiary HFG Holdings Inc.
Cequence's pro forma production capacity is 2,100 boe/d (88% natural gas). On September 21, 2009, Cequence announced that the operator of its wells located in the Gunnell area of north eastern British Columbia was shutting in the property based on the continued weakness in natural gas prices. This shut-in reduced Cequence's production by 500 boe/d to 1,600 boe/d.
Cequence Energy Ltd. is a publicly traded Canadian energy company involved in the acquisition, exploitation, exploration, development and production of natural gas and crude oil in western Canada. Further information about Cequence may be found in its continuous disclosure documents filed with Canadian securities regulators at www.sedar.com.
Forward Looking Information
Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: business strategy and objectives; information relating to the acquisitions and the benefits thereof; development, exploration, acquisition and disposition plans and the timing thereof; reserve quantities and the discounted present value of future net cash flows from such reserves including production from the properties; future production levels. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding, among other things: the impact of increasing competition; the ability to complete the acquisitions; timing for completing the acquisitions; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms including any financing required to complete the acquisitions; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of the Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking information. The material risk factors affecting the Company and its business are contained in the Company's Annual Information Form which is available under the Company's issuer profile on SEDAR at www.sedar.com.
The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.
Boes are presented on the basis of one Boe for six Mcf of natural gas. Disclosure provided herein in respect of Boes may be misleading, particularly if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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SOURCE Cequence Energy Ltd.
For further information: For further information: Howard Crone, President and Chief Executive Officer, (403) 229-3050, firstname.lastname@example.org or David Gillis, Vice President, Finance and Chief Financial Officer, (403) 229-3050, email@example.com