CALGARY,
Oct. 26, 2011 /PRNewswire/ - Equal
Energy Ltd. ("Equal" or the "Company") (TSX: EQU):
(NYSE: EQU) announces that it has entered into definitive
agreements to sell several non-core properties in Canada for a total cash consideration of
$49.35 million (the "Asset
Dispositions"). The proceeds from the Asset Dispositions
will be used to reduce outstanding debt.
Don Klapko,
President and CEO commented, "We are pleased to advance the sale of
non-core assets with the intention of improving our balance sheet
and providing additional financial flexibility for Equal. The
assets are not the focus of further development by Equal.
Equal will continue to develop its key oil plays in the Alliance
Viking and Lochend Cardium in Canada, and its liquids-rich gas play in the
Hunton formation of Oklahoma."
The definitive agreements relating to the Asset
Dispositions are subject to normal risks of closure and adjustments
to price under conventional terms typical of this type of
sale. The Asset Dispositions are anticipated to be completed
by December 1, 2011.
The Asset Dispositions include properties in
Alberta, Saskatchewan and British Columbia and compromise total current
production of about 2,100 boe/day, of which 51% is natural
gas. Upon closure of the transactions, Equal expects to
realize lower operating costs and interest expense resulting in
improved cash netbacks per unit of production on the remainder of
its assets. Equal estimates that its net asset value will be
approximately the same after the completion of the Asset
Dispositions. The Company anticipates its second half 2011
production to range between 9,200 - 9,700 boe/day, after taking
into consideration the Asset Dispositions.
During 2011 Equal drilled nine oil wells in the
Alliance Viking play, three oil wells in the Lochend Cardium play,
and is currently drilling the last of thirteen wells in the Hunton
liquids-rich gas play (six horizontal and seven vertical
wells). All wells are either on production or will be before
year end. Drilling in Canada
is expected to resume in late December
2011 and in Oklahoma in
January 2012. The core areas of
Alliance Viking, Lochend Cardium and Oklahoma Hunton will continue
to be the focus of Equal's capital program during 2012.
Additionally, Equal has amassed a significant
acreage position on an exciting new Mississippian light oil play in
Oklahoma that exists on acreage
held by production from certain of its Hunton fields. The
Company plans to continue consolidating acreage prospective for the
Mississippian while it considers options to begin development of
the play during 2012.
About Equal Energy Ltd.
Equal is an exploration and production oil and
gas company based in Calgary, Alberta,
Canada with its United
States operations office located in Oklahoma City, Oklahoma. Equal's
shares and debentures are listed on the Toronto Stock Exchange
under the symbols (EQU, EQU.DB.A, EQU.DB.B) and Equal's shares are
listed on the New York Stock Exchange under the symbol (EQU).
The portfolio of its core oil and gas properties is located in
Alberta, and Oklahoma. Production is comprised
of approximately 52 percent crude oil and natural gas liquids and
48 percent natural gas. Equal has compiled a multi-year
drilling inventory for its properties including its oil play
opportunities in the Cardium and Viking in central Alberta in addition to its extensive inventory
of drilling locations in the Hunton liquids-rich, natural gas play
in Oklahoma.
Forward-Looking Statements
Certain information in this press release
constitutes forward-looking statements under applicable securities
law. Any statements that are contained in this press release that
are not statements of historical fact may be deemed to be
forward-looking statements. Forward-looking statements are often
identified by terms such as "will" "may," "should," "anticipate,"
"expects," "seeks" and similar expressions. Specific
forward-looking statements included in this press release include
comments related to the closing of the Asset Dispositions, the use
of proceeds from the Asset Dispositions, the operational and
financial impacts of the Asset Dispositions on the Company and the
focus of Equal's ongoing drilling and development plans.
Forward-looking statements necessarily
involve known and unknown risks, including, without limitation,
uncertainty regarding the closing of the Asset Dispositions, risks
associated with oil and gas production; marketing and
transportation; loss of markets; volatility of commodity prices;
currency and interest rate fluctuations; imprecision of reserve
estimates; environmental risks; competition; incorrect assessment
of the value of acquisitions; failure to realize the anticipated
benefits of acquisitions or dispositions; inability to access
sufficient capital from internal and external sources; changes in
legislation, including but not limited to income tax, environmental
laws and regulatory matters
Readers are cautioned that the foregoing list
of factors is not exhaustive. Readers are cautioned not to place
undue reliance on forward-looking statements as there can be no
assurance that the plans, intentions or expectations upon which
they are placed will occur. Such information, although considered
reasonable by management at the time of preparation, may prove to
be incorrect and actual results may differ materially from those
anticipated Forward-looking statements contained in this press
release are expressly qualified by this cautionary
statement.
Additional information on these and other
factors that could affect Equal's operations or financial results
are included in Equal's reports on file with Canadian and U.S.
securities regulatory authorities and may be accessed through the
SEDAR website (www.sedar.com), the SEC's website
(www.sec.gov), Equal's website
(www.equalenergy.ca) or by contacting Equal.
Furthermore, the forward looking statements contained in this news
release are made as of the date of this news release, and Equal
does not undertake any obligation to update publicly or to revise
any of the included forward-looking statements, whether as a result
of new information, future events or otherwise, except as expressly
required by securities law.
CONVERSION: Natural gas volumes
recorded in thousand cubic feet ("mcf") are converted to barrels of
oil equivalent ("boe") using the ratio of six (6) mcf to one (1)
barrel of oil ("bbl"). Boe's may be misleading, particularly
if used in isolation. A boe conversion ratio of 6 mcf:1 bbl
is based on an energy equivalent conversion method primarily
applicable at the burner tip and does not represent a value
equivalent at the wellhead.
SOURCE Equal Energy Ltd.