CALGARY, Oct. 1, 2014 /CNW/ - Argent Energy Trust ("Argent" or the "Trust") (TSX: AET.UN) announces a decision by its Board of Directors to initiate a process to explore a range of strategic alternatives to maximize unitholder value. The Board will oversee the strategic alternatives review process with the assistance of senior management and its appointed external financial advisor, BMO Capital Markets.
The Board will consider all alternatives to increase unitholder value, which include among other alternatives: a sale of a material portion of the assets of the Trust; a sale of the Trust, either in one transaction or in a combination of transactions; a merger or other business combination; or a joint venture or a farmout on a material portion of the assets. Following an extensive review of the Trust's current unit price in the context of its operations, production and reserves, the Board has concluded that Argent trades at a substantial discount to the value of its underlying assets and is not getting recognition for the strategic direction implemented in April of this year which has resulted in a stabilized production base and a focus on debt repayment. The Board has determined that exploring strategic alternatives is the best course of action in order to maximize unitholder value.
The Board and its external financial advisor have not set a definitive schedule to complete this strategic review process. Argent does not intend to make any further announcements regarding the process unless and until the Board of Directors has approved a specific transaction or course of action or otherwise determines that disclosure of developments is appropriate. Argent cautions that there can be no assurances that this strategic review process will result in an acceptable transaction of any form.
In the meantime, the Trust's monthly distribution of $0.02 per unit remains intact.
Note About Forward-Looking Statements
This press release includes forward-looking information within the meaning of applicable Canadian and United States securities legislation. All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Argent budgets, forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information.
In particular, forward-looking information contained in this press release includes, but is not limited to, realizable value of the Trust's assets, the payment of cash distributions by the Trust, including the amount and timing of payment of cash distributions, ability to dispose of certain or all of its assets, completion of a strategic review process and ability for repayment of debt. With respect to forward-looking statements contained in this press release, assumptions have been made regarding, among other things, future oil and natural gas prices, future currency exchange and interest rates, the regulatory framework governing taxes in the US and Canada and the Trust's status as a "mutual fund trust" and not a "SIFT trust", and estimates of anticipated production from the Trust's assets.
The forward-looking information provided in this press release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events. Argent cautions that its future oil, natural gas and natural gas liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing and amount of future capital expenditures, and other forward-looking information is subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of oil and gas.
These risks include, but are not limited to, oil and natural gas price volatility, Argent's access to cash flows and other sources of liquidity to fund its capital expenditures, its level of indebtedness, its ability to replace production, the impact of the current financial climate on Argent's anticipated business and financial condition, a lack of availability of or increases in costs of goods and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, economic conditions and other risks as described in documents and reports that Argent files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR). Any of these factors could cause Argent's actual results and plans to differ materially from those contained in the forward-looking information.
There are many factors that could result in production levels being less than anticipated, including greater than anticipated declines in existing production due to poor reservoir performance, the unanticipated encroachment of water or other fluids into the producing formation, mechanical failures or human error or inability to access production facilities, among other factors. Furthermore, unlike fixed income securities, Argent has no obligation to distribute any fixed amount and reductions in, or suspension of, cash distributions may occur that would reduce future yield.
Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information. Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid. All forward-looking information speaks only as of the date of this press release, and Argent assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law. You should not place undue reliance on forward-looking information. You are encouraged to closely consider the additional disclosures and risk factors contained in Argent's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this press release.
Note regarding barrel of oil equivalency
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six Mcf to one bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of six to one, utilizing a boe conversion ratio of six Mcf to one bbl may be misleading as an indication of value.
SOURCE: Argent Energy Trust
For further information: John Elzner, President & Chief Executive Officer, Argent Energy Trust, (832) 320-9206; Sean Bovingdon, Chief Financial Officer, Argent Energy Trust, (403) 770-4809