Storm Resources Ltd. Announces Closing of Asset Disposition
CALGARY, ALBERTA -- (Marketwire) -- 02/15/13 -- STORM RESOURCES LTD. ("Storm") (TSX VENTURE:SRX) advises that the disposition of 275 Boe per day of production in the Grande Prairie area of northwest Alberta, as announced on January 23, 2013, has closed.
Proceeds from the disposition of $18 million, prior to normal adjustments, will be applied in reduction of bank debt. Pro forma net debt at December 31, 2012 is estimated to be $24 million after giving effect to this disposition and a smaller asset sale amounting to $2 million announced in January 2013. In addition, in the fourth quarter of 2012, $2 million was received from the sale of the remainder of Storm's shares in Bridge Energy ASA. Net debt includes the Company's working capital deficiency, but does not include the value of Storm's public company investment. Including the value of the public company investment, pro forma net debt at December 31, 2012 is estimated to be approximately $20 million. The disposition will result in Storm's bank credit facility being reduced from $62 million to $52 million.
This disposition is consistent with Storm's commitment to maintaining debt levels at a reasonable multiple of cash flow and to the better alignment of financial resources with growth opportunities. It provides Storm with financial flexibility to pursue additional projects, or to accelerate capital investment on development activities at existing properties if results are supportive of doing so.
Storm Resources Ltd. began operations in August 2010. Storm is headquartered in Calgary, Alberta and is active in the Horn River Basin and Umbach areas of northeast British Columbia, and at Grande Prairie in northwest Alberta.
FirstEnergy Capital Corp. of Calgary, Alberta, acted as sole agent to Storm for this asset sale.
Boe Presentation - For the purpose of calculating unit revenues and costs, natural gas is converted to a barrel of oil equivalent ("Boe") using six thousand cubic feet ("Mcf") of natural gas equal to one barrel of oil unless otherwise stated. Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of six Mcf to one barrel ("Bbl") is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All Boe measurements and conversions in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Mboe means 1,000 Boe.
Forward-Looking Statements - This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information concerning the combined company's working capital and bank facility, reserves, undeveloped land holdings and anticipated benefits from the disposition. The forward-looking statements and information are based on certain key expectations and assumptions made by Storm, including: expectations and assumptions concerning prevailing commodity prices and exchange rates; applicable royalty rates and tax laws; future well production rates and reserve volumes; the timing of receipt of regulatory and shareholder approvals; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services. Although Storm believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Storm can give no assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and dispositions; failure to realize the anticipated benefits of acquisitions and dispositions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. There are risks also inherent in the nature of the proposed disposition, including failure to realize anticipated production or reserve increases and decreases and incorrect assessments of values or future capital and operating costs
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Storm's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), and at Storm's website (www.stormresourcesltd.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Storm undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
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Storm Resources Ltd.
President and Chief Executive Officer
Storm Resources Ltd.
Chief Financial Officer
Storm Resources Ltd.
Manager, Corporate Affairs