Thunderbird Energy Announces US$25 Million Energy Stream Agreement With Sandstorm Metals & Energy
July 13 2011 - 8:56AM
Marketwired
Thunderbird Energy Corp. (TSX VENTURE: TBD) ("Thunderbird" or the
"Company") today announced that the Company has entered into a
US$25 million hydrocarbon purchase agreement (the "Agreement") with
Sandstorm Metals & Energy Ltd. ("Sandstorm"). Proceeds from the
Agreement will provide a substantial portion of the financing
required for a two-year development program at Thunderbird's Gordon
Creek, Utah natural gas property that will include drilling 50 new
wells and re-working 5 existing wells.
"We are very pleased to announce this innovative financing
arrangement with Sandstorm that will have a transformative effect
on our company," stated Rick Ironside, President of Thunderbird.
"We have reviewed a number of financing proposals over the last
couple of years and feel that the Sandstorm structure offers us the
best opportunity to aggressively develop our Gordon Creek field in
a manner that allows us the greatest flexibility, while also
maximizing the benefit to our shareholders and debenture
holders."
Under the Agreement, Sandstorm will have the right to purchase
35% of all natural gas produced from Thunderbird's Gordon Creek
property at a price equal to the lesser of the prevailing market
price and US$1.00 per Mcf of gas delivered plus 20% of the Gordon
Creek field gate price received above $4.00/Mcf. As consideration,
Thunderbird will receive an upfront payment of US$15 million in
2011 and a further US$10 million in 2012. The Agreement stipulates
that Thunderbird will drill 20 new Gordon Creek wells and conduct 5
workover operations in 2011, and will drill 30 new wells in 2012.
Sandstorm may participate in future wells drilled at Gordon Creek
beyond the initial 50 well program by providing additional
production payment advances to Thunderbird at an agreed amount per
well.
The Company has provided Sandstorm with minimum before tax cash
flow guarantees totaling US$25 million over the period 2012 through
2018, provided that the cash flow guarantees will not be applicable
to specific calendar years in which the Gordon Creek field achieves
specified minimum production levels. The Agreement also provides
Thunderbird with a two-year right to buy back 50% of the future
production committed under the Agreement, for a purchase price of
US$16.25 million.
Closing of the transaction is subject to regulatory approvals
and the completion by Sandstorm of its concurrently announced
equity financing. The transaction also requires the approval of
two-thirds of the holders of Thunderbird's Gas Linked
Debentures.
Thunderbird Energy is a Canadian-based oil and gas exploration
and production Company with interests in the US Rockies and
mid-continent regions. Thunderbird's holdings include the Gordon
Creek, Utah natural gas field, the Rush County, Kansas light oil
project and a light oil exploration project in Weston County,
Wyoming.
Caution Regarding Forward- looking information
Information in this news release respecting expected cash flows,
production levels and prices, as well as the expected closing,
timing and impact of the proposed financing transaction constitutes
forward-looking information. Statements containing forward-looking
information express, as at the date of this news release, the
Company's plans, expectations, or beliefs as to future events or
results are believed to be reasonable based on the information
currently available to the Company. The Company does not undertake
to update any such forward-looking statements unless required by
applicable securities legislation.
Statements including forward-looking information involve known
and unknown risks, uncertainties and other factors which may cause
the actual results of the Company and its operations to be
materially different from estimated costs or results expressed or
implied by such forward-looking statements.
There can be no assurance that forward-looking statements will
prove to be accurate. Actual results and future events could differ
materially from those anticipated in such statements. Readers
should not place undue reliance on forward-looking information.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Contacts: Thunderbird Energy Corp. Cam White Chief Executive
Officer 604-707-0373 cwhite@thunderbirdenergy.com Thunderbird
Energy Corp. Rick J. Ironside, P. Eng MBA President and COO
403-453-1608 rironside@thunderbirdenergy.com
www.thunderbirdenergy.com
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