CALGARY, March 29, 2016 /CNW/ - Cequence Energy Ltd. ("Cequence" or the "Company") (TSX: CQE) announces that in light of the challenging environment that currently exists for natural gas weighted companies, the Board has determined to make certain changes to the Cequence management team. The rationalized and revitalized management team's expertise is engineering and financially focused, which the Board believes is ideally suited for the stage of development and attributes of the Company's asset base within the context of the current commodity price environment.
Management Team Changes
Todd Brown has been promoted to the position of CEO and David Gillis has been promoted to the position of Executive VP and CFO; with James Jackson, VP, Engineering; Erin Thorson, Controller; Dave Robinson (VP, Geology) and Chris Soby (VP, Land) each continuing in their respective roles with the Company. The employment of Messrs. Wanklyn (President and CEO), Stewart (VP, Operations) and Stretch (VP Geophysics) ceased effective today.
Operational and G&A Initiatives
A number of initiatives will be actively pursued by Cequence throughout 2016 with the goal of realizing tangible operational netback improvements in 2017. These initiatives include advancing transportation efficiencies, implementing a water disposal scheme, reducing field chemical costs, plus other operational efficiency projects. In addition, annualized G&A savings of approximately $2.7 million are expected to be achieved through a leaner management structure and other targeted savings throughout 2016. Cequence remains undrawn on its bank line of credit and, in an effort to protect its balance sheet, Cequence plans minimal capital spending in the near term until such time as the outlook for commodity prices improve.
The Company expects to provide an updated business plan and guidance reflecting the foregoing initiatives together with the release of its first quarter results scheduled for May 10, 2016.
Strategic Alternatives Process
The Special Committee formed in connection with the previously announced strategic review process has evaluated all the proposals received during the process and is not currently pursuing any such proposals. The committee has determined that the changes to the management team and cost saving initiatives are the best course of action for the Company in the current environment. The Board and management of the Company will evaluate any proposals that may be subsequently received that could enhance shareholder value.
Board of Directors' Statement
The Board stated: "Our decision to implement the changes to the management team was an extremely difficult decision to make and it was made after a fulsome review of the Company's available strategic alternatives in a weakening commodity price environment. The Board concluded that these changes were necessary to provide shareholders with the best opportunity to realize the inherent value of Cequence's primary asset in Simonette. We strongly believe that the stewardship of these assets needs to be focused on reducing costs and preserving value rather than growth, until such time as commodity prices justify growth with improved economics for drilling and further developing the asset. The Simonette reserve base is now well defined and recognized with 108 booked and 150 un-booked drilling locations and infrastructure in place to fuel future growth when natural gas and oil and natural gas liquids prices improve. The Company is financially sound, with no bank debt and approximately 2.5 years until maturity of the CPPIB notes and, as a result, we believe Cequence is well positioned to meet the challenges of the commodity cycle. The management team and the Board will continue to look for complementary opportunities to enhance shareholder value beyond the cost saving initiatives underway. Finally, we wish Paul, Mike and Steve all the best in their future endeavors as they apply their talents to finding new opportunities. The Board thanks them for their contribution in building the Company."
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 Statements or Information
Certain statements included in this press release constitute forward-looking statements or forward-looking information under applicable securities legislation. Such forward-looking statements or information are 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 statements or information typically contain 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 statements or information in this press release include, but are not limited to, Cequence's G&A and operational cost savings initiatives and the expected results therefrom; the commodity pricing environment and potential improvements thereto and actions to be potentially taken by the Company in the event that prices improve; and the Company's capital spending plans. Forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are 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 statements or information. These risks and uncertainties may cause actual results to differ materially from the forward-looking statements or information. The material risk factors affecting the Company and its business are contained in the Company's Annual Information Form which is available on SEDAR at www.sedar.com.
The forward-looking statements or information contained in this press release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.
The TSX has neither approved nor disapproved the contents of this news release.
SOURCE Cequence Energy Ltd.