Altura Energy Inc. Announces a Funding Arrangement for up to $10.0 Million and Drilling Plans at Entice
CALGARY, Alberta, Dec. 04, 2019 (GLOBE NEWSWIRE) — Altura Energy Inc. (“Altura” or the “Corporation”) (TSXV: ATU) is pleased to announce it has entered into a definitive agreement for an asset sale with a private company (“PrivateCo”). Under the terms of the agreement, PrivateCo will acquire a 12.5% working interest (the “Disposition Assets”) in the Corporation’s production, wells, lands and facilities for $7.0 million in two transactions. The asset sale provides Altura the funding to advance drilling its oil prospect in the Entice area of Alberta while maintaining financial strength and flexibility to continue development of the Rex pool at Leduc-Woodbend.
The first transaction closed on December 4, 2019, whereby Altura divested Disposition Assets equal to 7.0% of corporate assets for $3.5 million. Proceeds will primarily be used to drill a horizontal well in the Entice area on or before March 31, 2020. Altura will carry PrivateCo for a 7.0% working interest in the well. The second transaction will close on or before December 31, 2020 whereby Altura will divest 5.5% of corporate assets for $3.5 million. Proceeds will primarily be used to drill a second horizontal well in the Entice area or a horizontal well in the Leduc-Woodbend area on or before December 31, 2020. If the well is drilled in Entice, PrivateCo will be carried for a 5.5% working interest in the well.In the event a second well is drilled in Entice and both parties agree to drill a third well in Entice, the agreement provides for a third transaction whereby Altura will divest an additional 4.0% of corporate assets for $3.0 million. Proceeds would primarily be used to drill a horizontal well in Entice on or before December 31, 2021. Altura would carry PrivateCo for a 4.0% working interest in the well. If all three transactions close, Altura will have sold a total working interest of 16.5% of corporate assets, including asset retirement obligations (“ARO”), for total consideration of $10.0 million. PrivateCo is arms-length to Altura and the transaction with PrivateCo constitutes an “exempt transaction” pursuant to TSXV Policy 5.3 because it satisfies the requirements of Section 3.1 of that policy.TRANSACTION METRICS