CALGARY, May 16, 2016 /CNW/ - Connacher Oil and Gas Limited (CLC – TSX; "Connacher" or the "Company") announces that it is initiating proceedings today at the Court of Queen's Bench of Alberta to seek creditor protection under the Companies' Creditors Arrangement Act ("CCAA").
As a result of, among other things, the current depressed prices for oil and Connacher's limited ability to access capital markets, and after careful consideration of all other available alternatives, the Special Committee of the Board of Directors of the Company determined that it was in the best interests of the Company and its stakeholders to apply for creditor protection under the CCAA.
Subject to CCAA Court approval and execution of definitive documents, the Company has received commitments from certain of its existing lenders for up to US$20 million in interim financing to support its continued operations. The interim financing is expected to provide sufficient liquidity to support the business of the Company during the CCAA proceedings. As part of the CCAA application, Connacher will seek approval of the appointment of Ernst & Young Inc. as the Monitor to oversee the CCAA proceedings and report to the Court.
During the CCAA proceedings, it is expected that every day obligations to employees, key suppliers of goods and services and the Company's customers will, after the filing date, continue to be met. While under CCAA protection, management of the Company will remain responsible for the day-to-day operations of the Company under the general oversight of the Monitor. At this time, there are no intended changes to the management team or the composition of the Board of Directors of the Company and the Company anticipates that such individuals will continue in their respective roles throughout the CCAA process.
The Company intends to seek approval to initiate a sale and investment solicitation process ("SISP") to be conducted in conjunction with the CCAA proceedings, intended to generate interest in the business and/or the assets of the Company, with the goal of maximizing value for all stakeholders of the Company.
Further news releases will be provided on an ongoing basis throughout the CCAA process as may be determined necessary.
Forward Looking Statements
This news release contains certain statements that constitute forward‑looking statements under applicable securities legislation. All statements other than statements of historical fact are forward‑looking statements. In some cases, forward‑looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", or the negative of these terms or other comparable terminology. These statements are only as of the date of this document and the Company does not undertake to publicly update these forward‑looking statements except in accordance with applicable securities laws. Forward‑looking statements, including but without limitation, statements concerning the implementation of CCAA proceedings are based on current expectations, estimates, projections and assumptions, which the Company believes are reasonable but which may prove to be incorrect and therefore such forward‑looking statements should not be unduly relied upon. These forward‑looking statements involve known and unknown risks, uncertainties which may cause actual results or performance to be materially different from any future results or performance expressed or implied herein. These risks, uncertainties and other factors relating to the Company include, but are not limited to, the level of indebtedness of the Company, the implementation and impact of obtaining any reorganization or restructuring of the assets, business and financial affairs of the Company, future co‑operation of the creditors of the Company, the Company's ability to generate sufficient cash‑flow from operations or to obtain adequate financing to fund capital expenditures and working capital needs and to meet the Company's ongoing obligations during the CCAA process and thereafter, the ability of the Company's common shares to remain listed and trading on the TSX, the ability to maintain relationships with suppliers, customers, employees, shareholders and other third parties in light of the Company's current liquidity situation and the CCAA proceedings, as well as other general assumptions regarding, among other things: industry activity; the general stability of the economic and political environment; effect of market conditions on demand for the Company's products; the ability to obtain qualified staff, equipment and services in a timely and cost efficient manner; the ability to operate its business in a safe, efficient and effective manner; the effect of current plans; the timing and costs of capital expenditures; future commodity prices; currency, exchange and interest rates; the regulatory framework regarding environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its products.
Additional risks and uncertainties affecting the Company and its business and affairs are described in further detail in the Company's AIF for the year ended December 31, 2015. Although the Company believes that the expectations in such forward looking information are reasonable, there can be no assurance that such expectations shall prove to be correct. Any forward looking information included in this press release is expressly qualified in its entirety by this cautionary statement. Any forward looking information included herein is made as of the date of this press release and the Company assumes no obligation to update or revise any forward looking information to reflect new events or circumstances, except as required by law.
SOURCE Connacher Oil and Gas Limited
For further information: Merle Johnson, Chief Operating Officer; Jeff Beeston, Vice President of Finance and Interim Chief Financial Officer; Connacher Oil and Gas Limited, Phone: (403) 538-6201, Fax: (403) 538-6225, Suite 900, 332 - 6th Avenue SW, Calgary, Alberta T2P 0B2, firstname.lastname@example.org, www.connacheroil.com