Equal Energy Announces Divestiture of Non-core Assets for Proceeds of $49.35 Million
October 26 2011 - 8:01AM
PR Newswire (Canada)
CALGARY, Oct. 26, 2011 /CNW/ - Equal Energy Ltd. ("Equal" or the
"Company") : 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. Equal Energy Ltd. CONTACT: DellChapman Don KlapkoChief
Financial President & CEOOfficer (403) 536-8373(403) 538-3580
or (877)or (877) 263-0262263-0262
info@equalenergy.cawww.equalenergy.ca
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