CALGARY, July 3, 2012 /CNW/ - Cequence Energy Ltd. ("Cequence") (TSX:
CQE) announces that Open Range Energy Corp. ("Open Range") (TSX: ONR)
has notified Cequence that: (i) the board of directors of Open Range
has determined that a proposal received from another publicly traded
oil and gas company (the "Competing Bidder") is financially superior to
the consideration offered pursuant to the previously announced
agreement (the "Arrangement Agreement") between Cequence and Open Range
whereby Cequence agreed to acquire all of the common shares of Open
Range; (ii) the board of directors of Open Range has approved an
agreement with the Competing Bidder whereby the Competing Bidder agreed
to acquire all of the common shares of Open Range; and (iii) Open Range
has terminated the Arrangement Agreement with Cequence.
In accordance with the terms of the Arrangement Agreement, Open Range
paid Cequence a termination fee of $4.6 million concurrently with the
termination of such agreement.
Cequence does not currently intend to reconsider the transaction with
Open Range in light of the value of the transaction between Open Range
and the Competing Bidder and overall market conditions, underscoring
its commitment to make disciplined investment decisions to achieve
growth. Cequence will continue to focus on the development of its
excellent portfolio of exploration opportunities in the Deep Basin
area. Further, Cequence will continue to pursue opportunities to
acquire assets which management anticipates will provide accretive
Cequence has a strong balance sheet with net debt of approximately $40
million, before giving effect to the termination fee discussed above,
and 190.5 million common shares outstanding.
In commenting on the Arrangement Agreement being terminated, Paul
Wanklyn, the President and CEO of Cequence, stated "While we are
disappointed that the proposed transaction with Open Range will not
proceed, we remain no less enthusiastic about Cequence's prospects than
we previously were. While another party seeking to purchase Open Range
supports our view that the Open Range assets would have been an
attractive addition to our portfolio, our primary asset remains our
holdings at Simonette, which are opportunity-rich. We are pleased that
our previously announced Aux Sable project at Simonette has been
operational since June 1, 2012 and we expect to see ongoing future
benefits through lower operating costs and higher netbacks at Simonette
as a result. Cequence is well capitalized, and will continue to take
the most prudent steps possible to deliver value to our shareholders."
Cequence 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: the previously announced
equity financings of Ceqence; Cequence's net debt; Cequence's pursuit
of acquisition opportunities; and the development of its asset base.
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 Cequence believes that the
expectations reflected in its forward-looking information is
reasonable, undue reliance should not be placed on forward-looking
information because Cequence cannot give assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified in this press release and
Cequence's continuous disclosure, assumptions have been made regarding
and are implicit in, among other things: cash flow projections and
netbacks; anticipated operating costs; bank debt levels; combined
reserves; field production rates and decline rates; the ability of
Cequence to secure adequate product transportation; the timely receipt
of any required regulatory approvals; the ability of Cequence to obtain
qualified staff, equipment and services in a timely and cost efficient
manner to develop its business; Cequence's ability to operate the
properties in a safe, efficient and effective manner; the ability of
Cequence to obtain financing on acceptable terms; the ability to
replace and expand oil and natural gas reserves through acquisition,
development and exploration; the timing and costs of pipeline, storage
and facility construction and expansion; future oil and natural gas
prices; currency, exchange and interest rates; the regulatory framework
regarding royalties, taxes and environmental matters; and the ability
of Cequence 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 Cequence and described in the forward-looking information. The
material risk factors affecting Cequence and its business are contained
in Cequence's Annual Information Form which is available under
Cequence'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 Cequence 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
Non-GAAP Measures: Within this press release, reference is made to terms
commonly used in the oil and gas industry such as "net debt", which is
not defined by IFRS in Canada and is referred to as a non-GAAP measure.
Net debt is calculated by Cequence as cash and net working capital less
commodity contract assets and liabilities and demand credit facilities
and excluding other liabilities and is used by management of Cequence
to assess the Company's debt situation. Non-GAAP financial measures do
not have a standardized meaning prescribed by IFRS and are therefore
may not be comparable to similar measures presented by other issuers.
The Toronto Stock Exchange has neither approved nor disapproved the
contents of this press release.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities in the United States, nor
shall there be any sale of the securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
SOURCE Cequence Energy Ltd.
For further information:
Paul Wanklyn, President & CEO, (403) 218-8850, firstname.lastname@example.org
David Gillis, VP Finance & CFO, (403) 806-4041, email@example.com