CALGARY, June 17, 2015 /CNW/ - Cequence Energy Ltd. ("Cequence" or the "Company") (TSX: CQE) is pleased to announce it has closed its previously announced transaction with Kanata Energy Group Ltd. ("KANATA") pursuant to which Cequence sold a 50% interest in its existing Simonette facilities and related infrastructure and Cequence and KANATA agreed to jointly fund an enhancement of the 13-11-62-27W5M Simonette gas compression and dehydration facility ("Facility"). The Facility enhancement includes adding a shallow cut refrigeration system and sales connection to TransCanada's NGTL system that improve the Company's marketing optionality and long term flow assurance from the Simonette area. The refrigeration plant will be capable of processing 120 mmcf/d of liquids rich natural gas which is expected to be sufficient to cover Cequence's development drilling plans for several years.
Proceeds of $34 million received by Cequence at closing of the sale of the existing Simonette facilities and infrastructure was applied to reduce the Company's indebtedness, resulting in March 31, 2015 adjusted net debt of $49 million. (1) Cequence's borrowing base under its senior credit facilities has been set at $135 million subject to unanimous lender consent for amounts borrowed in excess of $120 million. The Company's senior credit facility is currently undrawn.
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.
(1) March 31, 2015 adjusted net debt is calculated as March 31, 2015 cash and net working capital less commodity contract assets and liabilities, demand credit facilities, principal value of the senior notes and excluding other liabilities adjusted for the proceeds of $34 million for the sale of the Simonette infrastructure on closing.
Forward-looking Statements or Information and Advisory
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 may include, but are not limited to, statements or information with respect to its use of proceeds; business strategy and objectives; plant capabilities and meter station completion and capacity; future production levels; the Facility expansion and anticipated benefits; expected future oil and gas prices; and the timing of well completions. 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. 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 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; 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 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. 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.