Craft Oil Ltd. Announces Material Asset Disposition


Oil and Gas - Oct 17, 2016

Craft Oil ("Craft") is pleased to announce it has entered into a Purchase and Sale Agreement dated September 30, 2016 to sell certain properties located in the Province of Alberta with approximately 1,934 boepd (68% gas) for gross proceeds of $13.5 million. Proceeds to be received are comprised of $9.0 million cash and $4.5 million of tradeable debentures. The transaction is expected to close on or about October 27, 2016.

The transaction has the following benefits to Craft:


  • Reduces estimated net debt
  • Increases Craft projected Liability Management Rating ("LMR") to greater than 2.0 by year end
  • Focuses Craft's asset base to one core area and two non-core areas

Upon closing of the transaction, Craft will have the following characteristics:

  • Production of 2,400 boepd (69% gas)
  • 83% of production focused in Craft's Grand Prairie, Alberta core area
  • Net debt of less than $6.0 Million (excluding tradeable debentures mentioned above)
  • Estimated 2017 cash flow of $5.3 million(1)
  • Common Shares outstanding of 217,502,790 basic (253,252,790 fully diluted)

The transaction was executed as part of a plan to reduce the number of non-core properties and to focus the Company on its Core area of Grand Prairie, Alberta. Management looks forward to updating its shareholders as it progresses through its business plan.

Source : Craft Oil Ltd

Published on Global Energy World: Oct 17, 2016

 

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