(PIPE – TSX) Pipestone Energy Corp.
(“
Pipestone” or the “
Company”) is
pleased to announce the Toronto Stock Exchange (the
“
TSX”) has accepted the notice filed by the
Company to implement a normal course issuer bid (the
“
NCIB”).
The NCIB allows Pipestone to purchase up to
9,598,347 common shares (“Common Shares”),
representing 5% of its 191,966,942 outstanding Common Shares as at
November 12, 2021. The NCIB is scheduled to commence on November
25, 2021 and is due to expire no later than November 24, 2022.
Under the NCIB, Common Shares may be repurchased in open market
transactions on the TSX and other alternative trading platforms in
Canada and in accordance with the rules of the TSX governing
NCIB’s.
The total number of Common Shares Pipestone is
permitted to purchase is subject to a daily purchase limit of
55,099 Common Shares, representing 25% of the average trading
volume of 220,397 Common Shares on the TSX calculated for the
six-month period ended October 31, 2021; however, Pipestone may
make one block purchase per calendar week which exceeds the daily
repurchase restrictions. Any Common Shares that are purchased under
the NCIB will be cancelled upon their purchase by the Company.
Pipestone intends to fund the purchases out of
its available resources and is implementing the NCIB as part of its
free cash flow allocation strategy. Pipestone believes that, at
times, the prevailing share price may not reflect the underlying
value of the Common Shares and the repurchase of Common Shares
represents an opportunity to improve per share metrics as part of
the Company’s commitment to shareholder returns. The Company plans
on repurchasing Common Shares under the NCIB following its
commencement date.
The Company intends to enter into an automatic
securities purchase plan effective November 25, 2021, under which
its broker may purchase Common Shares in connection with the NCIB.
The plan will contain a prearranged set of criteria in accordance
with which its broker may make Common Share purchases. These strict
parameters enable the purchase of Common Shares during times when
it would ordinarily not be permitted due to self-imposed blackout
periods, insider trading rules or otherwise. Such plan is adopted
in accordance with applicable Canadian securities laws. Outside of
blackout periods, Common Shares may be purchased under the NCIB in
accordance with management’s discretion.
Pipestone Energy Corp.
Pipestone is an oil and gas exploration and
production company focused on developing its large contiguous and
condensate-rich Montney asset base in the Pipestone area near
Grande Prairie. Pipestone is fully funded to grow its production
from 25 Mboe/d in 2021 to 35 Mboe/d (midpoint) in 2022, while
generating significant free cash flow and de-leveraging the
business. Pipestone is committed to building long term value for
our shareholders while maintaining the highest possible
environmental and operating standards, as well as being an active
and contributing member to the communities in which it operates.
Pipestone shares trade under the symbol PIPE on the TSX. For more
information, visit www.pipestonecorp.com.
Pipestone Energy Contacts:
Paul WanklynPresident and Chief Executive Officer(587)
392-8407paul.wanklyn@pipestonecorp.com |
Craig NieboerChief Financial Officer(587)
392-8408craig.nieboer@pipestonecorp.com |
|
|
Dan van KesselVP Corporate Development(587)
392-8414dan.vankessel@pipestonecorp.com |
|
|
|
Non-GAAP measures
This press release includes references to
financial measures commonly used in the oil and natural gas
industry. The term “free cash flow” is not defined under IFRS,
which has been incorporated into Canadian GAAP, as set out in Part
1 of the Chartered Professional Accountants Canada Handbook –
Accounting, is not separately defined under GAAP, and may not be
comparable with similar measures presented by other companies.
Management believes the presentation of the
non-GAAP measures provide useful information to investors and
shareholders as the measures provide increased transparency and the
opportunity to better analyze and compare performance against prior
periods.
Free cash flow
“Free cash flow” is a non-GAAP measure that is
calculated as cash from operating activities plus changes in
non-cash working capital and decommissioning provision costs
incurred, less capital expenditures incurred, and is not defined
under IFRS. Free cash flow should not be considered an alternative
to, or more meaningful than, cash from operating activities, income
(loss) or other measures determined in accordance with IFRS as an
indicator of the Company’s performance. Management uses free cash
flow to analyze operating performance and leverage and believes it
is a useful supplemental measure as it provides an indication of
the funds generated by Pipestone’s principal business activities,
inclusive of ongoing capital expenditures, prior to consideration
of changes in working capital.
Advisory Regarding
Forward-Looking Statements
In the interest of providing shareholders of
Pipestone and potential investors information regarding Pipestone,
this news release contains certain information and statements
(“forward-looking statements”) that constitute forward-looking
information within the meaning of applicable Canadian securities
laws. Forward-looking statements relate to future results or
events, are based upon internal plans, intentions, expectations and
beliefs, and are subject to risks and uncertainties that may cause
actual results or events to differ materially from those indicated
or suggested therein. All statements other than statements of
current or historical fact constitute forward-looking statements.
Forward-looking statements are typically, but not always,
identified by words such as “anticipate”, “estimate”, “expect”,
“intend”, “forecast”, “continue”, “propose”, “may”, “will”,
“should”, “believe”, “plan”, “target”, “objective”, “project”,
“potential” and similar or other expressions indicating or
suggesting future results or events.
Forward-looking statements are not promises of
future outcomes. There is no assurance that the results or events
indicated or suggested by the forward-looking statements, or the
plans, intentions, expectations or beliefs contained therein or
upon which they are based, are correct or will in fact occur or be
realized (or if they do, what benefits Pipestone may derive
therefrom).
In particular, but without limiting the
foregoing, this news release contains forward-looking statements
pertaining to: the funding of purchases under the NCIB; Pipestone’s
plans to repurchase its Common Shares; the entering into of an
automatic securities purchase plan; advantages of the NCIB;
improved per share metrics; Pipestone’s free cash flow allocation
strategy; estimated 2022 production; de-leveraging; building long
term value for our shareholders; and maintaining environmental and
operating standards.
With respect to the forward-looking statements
contained in this news release, Pipestone has assessed material
factors and made assumptions regarding, among other things: future
commodity prices and currency exchange rates, including consistency
of future oil, natural gas liquids (NGLs) and natural gas prices
with current commodity price forecasts; the economic impacts of the
COVID-19 pandemic ; the ability to integrate Blackbird Energy
Inc.’s and Pipestone Oil Corp.’s historical businesses and
operations and realize financial, operational and other synergies
from the combination transaction completed on January 4, 2019;
Pipestone’s continued ability to obtain qualified staff and
equipment in a timely and cost-efficient manner; the predictability
of future results based on past and current experience; the
predictability and consistency of the legislative and regulatory
regime governing royalties, taxes, environmental matters and oil
and gas operations, both provincially and federally; Pipestone’s
ability to successfully market its production of oil, NGLs and
natural gas; the timing and success of drilling and completion
activities (and the extent to which the results thereof meet
expectations); Pipestone’s future production levels and amount of
future capital investment, and their consistency with Pipestone’s
current development plans and budget; future capital expenditure
requirements and the sufficiency thereof to achieve Pipestone’s
objectives; the successful application of drilling and completion
technology and processes; the applicability of new technologies for
recovery and production of Pipestone’s reserves and other
resources, and their ability to improve capital and operational
efficiencies in the future; the recoverability of Pipestone's
reserves and other resources; Pipestone’s ability to economically
produce oil and gas from its properties and the timing and cost to
do so; the performance of both new and existing wells; future cash
flows from production; future sources of funding for Pipestone’s
capital program, and its ability to obtain external financing when
required and on acceptable terms; future debt levels; geological
and engineering estimates in respect of Pipestone’s reserves and
other resources; the accuracy of geological and geophysical data
and the interpretation thereof; the geography of the areas in which
Pipestone conducts exploration and development activities; the
timely receipt of required regulatory approvals; the access,
economic, regulatory and physical limitations to which Pipestone
may be subject from time to time; and the impact of industry
competition.
The forward-looking statements contained herein
reflect management's current views, but the assessments and
assumptions upon which they are based may prove to be incorrect.
Although Pipestone believes that its underlying assessments and
assumptions are reasonable based on currently available
information, undue reliance should not be placed on forward-looking
statements, which are inherently uncertain, depend upon the
accuracy of such assessments and assumptions, and are subject to
known and unknown risks, uncertainties and other factors, both
general and specific, many of which are beyond Pipestone’s control,
that may cause actual results or events to differ materially from
those indicated or suggested in the forward-looking statements.
Such risks and uncertainties include, but are not limited to,
volatility in market prices and demand for oil, NGLs and natural
gas and hedging activities related thereto; the ability to
successfully integrate Blackbird’s and Pipestone Oil’s historical
businesses and operations; general economic, business and industry
conditions; variance of Pipestone’s actual capital costs, operating
costs and economic returns from those anticipated; the ability to
find, develop or acquire additional reserves and the availability
of the capital or financing necessary to do so on satisfactory
terms; and risks related to the exploration, development and
production of oil and natural gas reserves and resources.
Additional risks, uncertainties and other factors are discussed in
the MD&A dated November 10, 2021 and in
Pipestone’s annual information form dated March 10, 2021, copies of
which are available electronically on Pipestone’s SEDAR at
www.sedar.com.
Oil and Gas Measures
Basis of Barrel of Oil Equivalent
Petroleum and natural gas reserves and
production volumes are stated as a “barrel of oil equivalent”
(boe), derived by converting natural gas to oil equivalency in the
ratio of 6,000 cubic feet of gas to one barrel of oil. Readers are
cautioned that boe figures may be misleading, particularly if used
in isolation. A boe conversion ratio of 6,000 cubic feet of gas to
one barrel of oil is based on energy equivalency, which is
primarily applicable at the burner tip, and does not represent a
value equivalency at the wellhead.
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