CALGARY, Aug. 16, 2017 /CNW/ - Sterling Resources Ltd. (TSXV:SLG) ("Sterling" or the "Company") announces interim operating and financial results for the three and six month periods ended June 30, 2017. Unless otherwise noted, all figures contained in this release are denominated in United States dollars. The Company's interim condensed consolidated financial statements and management's discussion and analysis ("MD&A") for the reporting period have been filed on SEDAR at www.sedar.com and posted on the Company's website at www.sterling-resources.com.
On May 16, 2017, the sale of all or substantially all of the assets of the Company resulting from the sale by the Company's wholly-owned subsidiary SRUK Holdings Ltd. ("SHL") of the entire issued share capital of Sterling Resources (UK) Ltd. (the "Transaction") pursuant to a share purchase agreement dated March 3, 2017 between the Company, SHL and Oranje-Nassau Energie B.V. ("ONE") was completed. Thereafter, the Company has begun to undertake the steps necessary to wind-up and dissolve the Company as economically and quickly as practical, and to deliver the net distributable proceeds into the hands of the shareholders.
With the commencement of the winding-up process, the Company no longer continues as a going concern.
FINANCIAL AND OPERATING HIGHLIGHTS
- Net working capital was a surplus of $17.2 million as at June 30, 2017, and has reduced during the quarter following the return of capital to shareholders of $92.8 million on June 30, 2017.
- The net proceeds of the Transaction of $113.8 million (the netting of the assets held for sale less the liabilities associated with the assets held for sale) were received on May 16, 2017, and a further $1,393,000 is expected to be received during the third quarter of 2017 relating to post-completion adjustments.
- For the six month period ended June 30, 2017, the Company recorded a net loss of $6.3 million ($0.04 per weighted average Common Share) for continued operations and a loss of $242.9 million ($1.65 per weighted average Common Share) for discontinued operations compared with a net loss of $1.5 million ($0.00 per weighted average Common Share) for continued operations and a loss of $25.3 million ($0.01 per weighted average Common Share) for discontinued operations in the six month period ended June 30, 2016. The net loss in 2017, compared to 2016, was much higher following the completion of the Transaction, resulting in a write-down of $171,975,000 on the discontinued operations.
- For the three month period ended June 30, 2017, the Company recorded a net loss of $0.6 million ($0.01 per weighted average Common Share) for continued operations and a loss of $78.1 million ($0.53 per weighted average Common Share) for discontinued operations compared with a net profit of $0.1 million ($0.00 per weighted average Common Share) for continued operations and a loss of $9.2 million ($0.00 per weighted average Common Share) for discontinued operations in the three month period ended June 30, 2016. The net loss in 2017, compared to 2016, was higher following the completion of the Transaction.
- For the six month period ended June 30, 2017, revenue was $15.0 million, compared to $24.8 million for the six month period ended June 30, 2016. Revenue was recorded until May 16, 2017, the Transaction completion date.
- Breagh sales of gas production were approximately 2.4 billion cubic feet at an average realized gas price of 42.5 pence per therm during the six month period ended June 30, 2017, compared to 4.1 billion cubic feet at an average realized gas price of 30.6 pence per therm for the six month period ended June 30, 2016. Production was recorded until May 16, 2017, the Transaction completion date.
NON-GAAP FINANCIAL MEASURES
This news release contains references to certain financial measures used by the Company that do not have a standardized meaning prescribed by GAAP and may not be comparable to similar measures presented by other entities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with GAAP. The non-GAAP measures and their manner of reconciliation to GAAP financial measures are discussed below. These non-GAAP measures provide additional information that management believes is meaningful in describing the Company's operational performance, liquidity and capacity to fund capital expenditures and other activities. The specific rationale for, and incremental information associated with, each non-GAAP measure is discussed below.
Net working capital surplus, as used in this news release, is defined as current assets less current liabilities excluding the Cladhan funding arrangements (now disposed of) and is used to monitor the short term financial health of the Company.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Filer Profile No. 00002072
All statements included in this news release that address activities, events or developments that Sterling expects, believes or anticipates will, should or may occur in the future are forward-looking statements. In particular, this news release contains forward-looking statements with respect to the wind-up and dissolution of the Company, the receipt of further proceeds during the third quarter as a result of Transaction post-closing adjustments and the delivery of the net distributable proceeds to shareholders.
These forward-looking statements involve numerous assumptions made by Sterling based on its experience, perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. In addition, these statements involve substantial known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate, certain of which are beyond Sterling's control, including: the impact of general economic conditions in the areas in which Sterling operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with oil and gas operations. Readers should also carefully consider the matters listed under the heading "Risk Factors" in the Company's MD&A.
Undue reliance should not be placed on these forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Sterling's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. These statements speak only as of the date of the news release. Sterling does not intend and does not assume any obligation to update these forward-looking statements except as required by law.
Sterling Resources Ltd. is a Canadian-listed company whose registered office is in Calgary, Alberta. The Common Shares are listed and posted for trading on the TSXV under the symbol "SLG".
SOURCE Sterling Resources Ltd.
For further information: John Rapach, Chief Executive Officer, email@example.com; Christine Shinnie, Chief Financial Officer, firstname.lastname@example.org; Tracy Lessard, Corporate Secretary, email@example.com; www.sterling-resources.com