CALGARY, AB—(Marketwired – June 06, 2016) – Marquee Energy Ltd. (“Marquee” or the “Company”) (TSX VENTURE: MQL) (OTCQX: MQLXF) announces that it has closed the disposition of certain assets and related liabilities, consisting of its non–core heavy oil asset at Lloydminster, Alberta and a property in western Alberta to a third party (“Privateco”) (“Transaction”). The effective date of the Transaction is June 1, 2016.
As previously reported on March 19, 2015 Marquee sold a production volume royalty (“PVR”) on its Lloydminster property in return for $20 million. A portion of these proceeds were used to fund a strategic acquisition by the Company in its core light oil property at Michichi. Under the PVR agreement, Marquee committed the first 137.5 barrels per day of production from the Lloydminster property to the royalty owner and made a commitment to the royalty owner to spend a minimum of $2.75 million per year for 8 years beginning in 2016 on drilling activities related to the PVR lands. Under the Transaction, Marquee has assigned its interest in the Lloydminster property along with all related PVR obligations and capital commitments to Privateco in return for nominal consideration.
In May 2016, the Lloydminster property averaged approximately 357 barrels per day of heavy oil production and generated minor cash flow after payment of operating and royalty costs. The Company expects that the disposition of its Lloydminster property should have a positive effect on its PDP NPV10 reserves and its credit facility.
The other minor non–core property involved in this Transaction has been shut in since April 2015, and has approximately $250,000 per year of associated fixed costs. The Transaction will reduce corporate abandonment and reclamation obligations (“ARO”) by about $6.8 million. These dispositions are consistent with Marquee's strategy to divest of the Company's non–core assets to further focus the Company on its Banff light oil play at Michichi and improve its balance sheet in the form of reduced costs, future liabilities and indebtedness.
Dundee Capital Markets acted as a strategic advisor to Marquee with respect to the Transaction.
The Company's Annual General Meeting of Shareholders is scheduled for 2:00 PM (Calgary time) on Wednesday June 22, 2016 in the Altius Building: Second Floor, 500 4th Avenue SW, Calgary, AB, the record date for which was May 19, 2016.
Marquee Energy Ltd. is a Calgary based, junior energy company focused on high rate of return light oil development and production. Marquee is committed to growing the company through exploitation of existing opportunities and continued consolidation within its core area at Michichi. The Company's shares are traded on the TSX Venture Exchange under the trading symbol “MQL” and on the OTCQX marketplace under the symbol “MQLXF”. Current information about Marquee may be found on its website www.marquee–energy.com and in its continuous disclosure documents filed with Canadian securities regulators on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.
FORWARD–LOOKING STATEMENTS OR INFORMATION
Certain statements included or incorporated by reference in this news release may constitute forward–looking statements under applicable securities legislation. Such forward–looking statements or information typically contain statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, or similar words suggesting future outcomes or statements regarding an outlook. Forward–looking statements or information in this news release may include, but are not limited to, the expected benefits of the Transaction.
Such forward–looking statements or information are based on a number of assumptions all or any of which may prove to be incorrect. In addition to any other assumptions identified in this document, assumptions have been made regarding, among other things, the expected benefits and results of the Transaction.
Forward–looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward–looking information. Material risk factors affecting the Company and its business are contained in Marquee's Annual Information Form, which is available under Marquee's issuer profile on SEDAR at www.sedar.com.
The forward–looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward–looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward–looking information contained in this press release is expressly qualified by this cautionary statement.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.