CALGARY, March 16, 2020 /CNW/ - TORC Oil & Gas Ltd. ("TORC" or the "Company") (TSX:TOG) announces a reduction in the monthly dividend from $0.025 per month to $0.005 per month and an ongoing review of capital spending plans for the remainder of 2020.
TORC confirms that a cash dividend of $0.005 per common share will be paid on April 15, 2020 to common shareholders of record on March 31, 2020.
The approved monthly dividend of $0.005 per common share has been reduced from the previous monthly level of $0.025 per common share as a result of the significant decline in global oil prices. The reduction of the dividend results in a decrease in TORC's funding requirements of $53 million on an annualized basis.
The ex-dividend date is March 30, 2020 and the dividend has been designated as an "eligible dividend" for Canadian income tax purposes.
CAPITAL SPENDING UPDATE
Consistent with normal course operations, TORC's first quarter capital program is now complete with no operations currently scheduled due to spring break-up conditions. In addition, limited capital expenditures are expected to be spent during the spring break-up period providing the Company with flexibility to undertake a thorough review of the 2020 capital program in the context of recent world events. The Company expects to defer, reallocate and reduce capital in the second half of the year as current business conditions persist.
TORC's asset base has the following characteristics to provide operational flexibility to effectively match cash flows with expenditures in order to maintain financial flexibility: greater than 90% operated capital program, low decline rate, industry leading netbacks, year-round access, low capital costs per well, no drilling commitments, limited take-or-pay contracts, and no land expiry concerns.
NEAR TERM OUTLOOK
The crude oil market has experienced a significant and rapid decline in world prices resulting from severe dynamics coinciding to significantly impact both supply and demand uncertainty. The concurrence of these dynamics has created uncertainty and volatility for energy producers, particularly related to near-term liquidity and capital spending.
Consistent with TORC's focus on protecting the Company's balance sheet, it is prudent to move quickly to remain well positioned to ensure sustainability of the business model. TORC assures all stakeholders that all necessary steps will be taken, even if temporary, to protect the Company's long term position of strength. TORC has a disciplined track record and will remain focused on long-term objectives in this period of uncertainty and volatility.
TORC Oil & Gas Ltd. is a Calgary based company active in the acquisition, exploration, development and production of crude oil and natural gas in Western Canada.
Forward Looking Statements
This press release contains forward‐looking statements and forward‐looking information (collectively "forward‐looking information") within the meaning of applicable securities laws relating to the Company's plans, strategy, business model, focus and objectives. In addition, and without limiting the foregoing, this press release contains forward-information regarding: the Company's dividend funding requirements, future capital expenditures plans, management's view of the characteristics and ability of the Company's asset base; plans to effectively match cash flows with expenditures in order to maintain financial flexibility; TORC's dividend policy and plans; and other matters ancillary or incidental to the foregoing.
Forward‐looking information typically uses words such as "anticipate", "believe", "project", "target", "guidance", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. The forward‐looking information is based on certain key expectations and assumptions made by TORC's management, including expectations concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; capital efficiencies; decline rates; future production rates and estimates of operating costs; performance of existing and future wells; reserve and resource volumes; anticipated timing and results of capital expenditures; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; the timing, location and extent of future drilling operations; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and TORC's ability to access capital.
The payment and the amount of dividends declared in any month will be subject to the discretion of the board of directors and will depend on the board of director's assessment of TORC's outlook for growth, capital expenditure requirements, funds from operations, potential acquisition opportunities, debt position and other conditions that the board of directors may consider relevant at such future time. The amount of future cash dividends, if any, may also vary depending on a variety of factors, including fluctuations in commodity prices and differentials, production levels, capital expenditure requirements, debt service requirements, operating costs, royalty burdens and foreign exchange rates.
Although the Company believes that the expectations and assumptions on which such forward‐looking information is based are reasonable, undue reliance should not be placed on the forward‐looking information because TORC can give no assurance that they will prove to be correct. Since forward‐looking information addresses future events and conditions, by its very nature they involve inherent risks and uncertainties. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward‐looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward‐looking information will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Management has included the above summary of assumptions and risks related to forward‐looking information provided in this press release in order to provide securityholders with a more complete perspective on TORC's future operations and such information may not be appropriate for other purposes.
Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other factors that could affect TORC's operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
These forward‐looking statements are made as of the date of this press release and TORC disclaims any intent or obligation to update publicly any forward‐looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
SOURCE TORC Oil & Gas Ltd.
For further information: TORC Oil & Gas Ltd., Brett Herman, President and Chief Executive Officer, Telephone: (403) 930-4120, Facsimile: (403) 930-4159; TORC Oil & Gas Ltd., Jason J. Zabinsky, Vice President, Finance and Chief Financial Officer, Telephone: (403) 930-4120, Facsimile: (403) 930-4159, www.torcoil.com