CALGARY, AB, Dec. 22, 2020 /CNW/ - Bonterra Energy Corp.
(www.bonterraenergy.com) (TSX: BNE) ("Bonterra" or the "Company")
today acknowledges amendments to the unsolicited offer from
Obsidian Energy Ltd. ("Obsidian") to purchase all of the issued and
outstanding common shares of Bonterra (the "Hostile Bid") and
continues to recommend that Bonterra Shareholders take no
action, and REJECT the Hostile Bid by NOT
TENDERING their shares.
Obsidian's Hostile Bid has proven to be unsuccessful, with
Bonterra shareholders overwhelmingly advising they will not tender
their shares. Rather than acknowledge the views of Bonterra
shareholders and withdraw the Hostile Bid, Obsidian has instead
chosen to extend the tender date of the Hostile Bid from
January 4th to
January 25th, 2021. In
addition, Obsidian has reduced the minimum number of outstanding
Bonterra shares that must be tendered to complete the Hostile Bid
from the customary 66 2/3 percent down to over 50 percent. This
change indicates that Obsidian does not expect the higher tender
condition will be achieved due to the lack of Bonterra shareholder
support of the Hostile Bid.
Meanwhile, Obsidian has not addressed its ability to obtain the
third-party consents and approvals required to complete the Hostile
Bid, including the consent of each of Obsidian's and Bonterra's
lenders. In addition, the rationale of the Hostile Bid is highly
dependent on the achievement of significant synergies and cost
savings which remain uncertain, and Obsidian's significantly higher
asset retirement obligations remain and will leave Bonterra
shareholders a disproportionately higher allocation of future
abandonment liabilities.
Bonterra's position regarding the Hostile Bid has not changed
and the Company intends to provide a more fulsome response
following careful review of Obsidian's Notice of Extension,
Variation and Change which was filed today with Canadian securities
regulators. Details on Bonterra's response to the filed
documents will be made available on the Company's website at
www.bonterraenergy.com.
Operational Update
Following the receipt of $45
million of lending commitment from the Business Development
Bank of Canada ("BDC") to fund a
development drilling program and $38.4
million from Export Development Canada ("EDC") to reduce
existing lenders commitments, Bonterra has continued to
successfully execute its go-forward strategic plan, which includes
a target to grow production in 2021 by more than 30 percent and
return average annual production to pre-COVID levels of
approximately 13,000 BOE per day. Bonterra was one of the
first Canadian energy producers to qualify and be approved for both
the EDC and BDC government support programs, a condition of which
is financial viability.
Bonterra is pleased to confirm the successful and efficient
execution of its Q3 - Q4 2020 capital budget, which has, and will
continue to be, funded in part by the BDC commitment. Under
this capital program, 15.8 net wells have been drilled and 13.0 net
wells completed, which positions Bonterra to enter 2021 with an
inventory of 3.8 net drilled but uncompleted wells ("DUCs").
Significant efficiencies have been captured in Bonterra's recent
capital program, with per well costs averaging $1.4 million, representing a 33 percent
improvement relative to average well costs in 2019. The
Company intends to resume its 2021 capital program in early January
2021.
Under Alberta's Site
Rehabilitation Program ("SRP"), Bonterra has successfully abandoned
a further 68 net wells during Q3-Q4 2020, building on the 45 net
wells abandoned by the Company in Q1 2020. As Bonterra
continues to execute under the SRP through 2021, a further 191 net
wells are forecast to be abandoned. Bonterra expects to
reduce its inactive well count by approximately 60 percent over the
next two years under current approvals. With the combination of BDC
and SRP funding, Bonterra has established a strong position to
enhance its financial flexibility while remaining focused on
shareholder value creation.
Shareholder Questions
Shareholders with questions are encouraged to call Bonterra's
information agent, Laurel Hill Advisory Group at 1-877-452-7184
(+1-416-304-0211 outside North
America) or email assistance@laurelhill.com.
About Bonterra
Bonterra Energy Corp. is a conventional oil and gas corporation
with operations in Alberta,
Saskatchewan and British Columbia, focused on its strategy of
long-term, sustainable growth and value creation for shareholders.
The Company's shares are listed on The Toronto Stock Exchange under
the symbol "BNE".
Forward Looking Information
Certain statements contained in this release include statements
which contain words such as "anticipate", "could", "should",
"expect", "seek", "may", "intend", "likely", "will", "believe" and
similar expressions, relating to matters that are not historical
facts, and such statements of our beliefs, intentions and
expectations about development, results and events which will or
may occur in the future, constitute "forward-looking information"
within the meaning of applicable Canadian securities legislation
and are based on certain assumptions and analysis made by us
derived from our experience and perceptions. Forward-looking
information in this release includes, but is not limited to: credit
commitments pursuant to the EDC, BDC and SRP programs and the
anticipated amount and terms of funding that will become available
to the Company pursuant to such programs; the Company's spending
commitments under the ABC program; the Company's inactive well
count; the Company's strategic plan and drilling program;
expectations regarding production growth, production volumes,
capital expenditures, operating costs and general and
administrative costs; business strategy and outlook; expansion and
growth of our business and operations; and other such matters.
All such forward-looking information is based on certain
assumptions and analyses made by us in light of our experience and
perception of historical trends, current conditions and expected
future developments, as well as other factors we believe are
appropriate in the circumstances. The risks, uncertainties and
assumptions are difficult to predict and may affect operations, and
may include, without limitation: risks and uncertainties relating
to the satisfaction of all conditions relating to the availability
of funding pursuant to government programs; foreign exchange
fluctuations; equipment and labour shortages and inflationary
costs; general economic conditions; industry conditions; changes in
applicable environmental, taxation and other laws and regulations
as well as how such laws and regulations are interpreted and
enforced; the ability of oil and natural gas companies to raise
capital; the effect of weather conditions on operations and
facilities; the existence of operating risks; volatility of oil and
natural gas prices; oil and gas product supply and demand; risks
inherent in the ability to generate sufficient cash flow from
operations to meet current and future obligations; increased
competition; stock market volatility; opportunities available to or
pursued by us; and other factors, many of which are beyond our
control.
Actual results, performance or achievements could differ
materially from those expressed in, or implied by, this
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, what
benefits will be derived therefrom. Except as required by law,
Bonterra disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise. The forward-looking
information contained herein is expressly qualified by this
cautionary statement.
Oil and Gas Information
"BOE" refers to barrels of oil equivalent. Disclosure provided
herein in respect of a BOE may be misleading, particularly if used
in isolation. A BOE conversion ratio of 6 MCF: 1 bbl is based on an
energy conversion method primarily applicable at the burner tip and
does not represent a value equivalency at the wellhead.
Numerical Amounts
The reporting and the functional currency of the Company is
the Canadian dollar.
The TSX does not accept responsibility for the
accuracy of this release.
SOURCE Bonterra Energy Corp.
