Distinction Energy Corp. Announces Strategic Simonette Asset Acquisition
CALGARY, Alberta, Feb. 17, 2021 (GLOBE NEWSWIRE) — Distinction Energy Corp. (“ Distinction ” or the “ Company ”) is pleased to announce its commitment to participate as to 50% in a $335 million acquisition, including $15 million in contingency payments based on future commodity prices, entered into by Kiwetinohk Resources Corp. (“ Kiwetinohk ”) for certain interests in the Simonette area of northwest Alberta (the “ Acquisition ”). The Acquisition consists of certain multi-zone, oil and liquids-rich natural gas producing assets in the Simonette area of northwest Alberta, including associated infrastructure and additional assets in the Willesden Green and Ferrier areas of Alberta. Currently, the assets to be acquired are producing approximately 10,000 barrels of oil equivalent per day (“boe/d”), weighted 43 percent to liquids.
Distinction and Kiwetinohk, a majority shareholder of Distinction’s issued and outstanding common shares, have agreed through an Acquisition Opportunity Agreement that the Acquisition and the purchase price (subject to adjustments) will be split equally. Distinction’s portion of the acquisition will be financed with cash on hand and a $127.5 million credit facility with ATB Capital Markets (syndicate lead), National Bank of Canada and Bank of Montreal. The Acquisition is anticipated to close in the second quarter and is subject to applicable regulatory approvals and other customary conditions.
ATB Capital Markets has acted as financial advisor to Distinction in connection with the transaction.
About Distinction Energy Corp.
Distinction Energy Corp. is an industry-leading producer of liquids-rich natural gas. The Company has achieved top decile results through the development of our high quality Montney property, uniquely positioned in the Deep Basin of Bigstone, in northwest Alberta. Distinction continues to outperform key industry players by improving operational efficiencies and growing our dominant Bigstone land position in this world-class play. Distinction is headquartered in Calgary, Alberta.
FOR FURTHER INFORMATION PLEASE CONTACT:
DISTINCTION ENERGY CORP.
2300 – 333 – 7th Avenue S.W.
Calgary, Alberta. T2P 2Z1
Telephone: (403) 265-6171 Facsimile: (403) 265-6207
Email: [email protected] Website: www.delphienergy.ca
President, CEO & Chairman
Forward-Looking Statements . This news release contains forward-looking statements and forward-looking information within the meaning of applicable Canadian securities laws. These statements relate to future events or the Company’s future performance and are based upon the Company’s internal assumptions and expectations. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “intends”, “forecast”, “plans”, “guidance”, “budget” and similar expressions.
More particularly and without limitation, this release contains forward-looking statements and information relating to, among other things, the expected closing of the Acquisition. The forward-looking statements and information contained in this release are based on certain key expectations and assumptions made by Distinction. The following are certain material assumptions on which the forward-looking statements and information contained in this release are based: the ability of the Company to obtain the required regulatory and customary approvals to complete the Acquisition; the ability of the Company to satisfy the conditions to draw down on the credit facility to fund its portion of the purchase price; the satisfaction by Kiwetinohk of its obligations and conditions to close on its portion of the Acquisition; the Company’s future liquidity position, and access to capital, to fund ongoing operations and obligations; the general regulatory environment in which the Company operates; the tax treatment of the Company and the materiality of any legal and regulatory proceedings; the stability of the global and national economic environment, the stability of and commercial acceptability of tax, royalty and regulatory regimes applicable to Distinction, exploitation and development activities being consistent with management’s expectations, production levels of Distinction being consistent with management’s expectations, the absence of significant project delays, the stability of oil and gas prices, the absence of significant fluctuations in foreign exchange rates and interest rates, the stability of costs of oil and gas development and production in Western Canada, including operating costs, the timing and size of development plans and capital expenditures, availability of third party infrastructure for transportation, processing or marketing of oil and natural gas volumes, prices and availability of oilfield services and equipment being consistent with management’s expectations, the availability of, and competition for, among other things, pipeline capacity, skilled personnel and drilling and related services and equipment, results of development and exploitation activities that are consistent with management’s expectations, weather affecting Distinction’s ability to develop and produce as expected, contracted parties providing goods and services on the agreed timeframes, Distinction’s ability to manage environmental risks and hazards and the cost of complying with environmental regulations, the accuracy of operating cost estimates, the accurate estimation of oil and gas reserves, future exploitation, development and production results and Distinction’s ability to market oil and natural gas successfully to current and new customers. Additionally, estimates as to expected average annual production rates assume that no unexpected outages occur in the infrastructure that the Company relies on to produce its wells, that existing wells continue to meet production expectations and any future wells scheduled to come on in the coming year meet timing and production expectations.
Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent known and unknown risks and uncertainties. Distinction’s actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Distinction will derive therefrom. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with securing the required regulatory and customary approvals to complete the Acquisition; the ability of the Company to satisfy the conditions to draw down on the credit facility to fund its portion of the purchase price; the integration of operation of the Acquisition assets with those of the Company; 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 estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition from others for scarce resources, the ability to access sufficient capital from internal and external sources, changes in governmental regulation of the oil and gas industry and changes in tax, royalty and environmental legislation. Additional information on these and other factors that could affect the Company’s operations or financial results are included in the Company’s most recent Annual Information Form and other reports on file with the applicable securities regulatory authorities and may be accessed through the SEDAR website ( www.sedar.com ).
Readers are cautioned that the foregoing list of factors is not exhaustive. Furthermore, the forward-looking statements contained in this release are made as of the date of this release for the purpose of providing the readers with the Company’s expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. Distinction 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. The forward-looking statements contained in this release are expressly qualified in their entirety by this cautionary statement.
The use of the boe unit of measurement may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf of natural gas to 1 barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.