CALGARY, Alberta, Aug. 11, 2016 (GLOBE NEWSWIRE) -- Quattro Exploration And Production Ltd. (TSXV:QXP) ("Quattro" or the "Company") announced today an increase in its divestiture plan to $30,000,000 including its previously announced asset sale of $24,250,000 and has filed a Notice of Intention to Make a Proposal (“Notice of Intention”) under the provisions of Part III of the Bankruptcy and Insolvency Act (the “BIA”). The notice was filed by the Company in order to allow it the necessary time to complete the previously announced asset sale and the sale of additional non-core assets that are currently in process, protecting Quattro and its assets from the claims of creditors and others while the Company pursues these objectives.
The Company is also pleased to announce that it is evaluating a number of financing proposals that are complementary to its current lender’s continued funding of the Quattro's business plan.
Pursuant to the Notice of Intention, Hardie and Kelly Inc. has been appointed as the trustee in the Company's proposal proceedings and will assist the Company in these efforts.
The decision to file the Notice of Intention was made by Quattro’s board of directors following aggressive actions by certain of the Company’s trade creditors that have been limiting the Company’s ability to execute its business plan in an orderly manner.
A Notice of Intention permits the Company to pursue the restructuring of its financial affairs through an orderly and formal proposal process. The filing of the Notice of Intention has the effect of imposing an automatic stay of proceedings (“Stay”) that will protect the Company and its assets from the claims of creditors and others. The initial Stay period of 30 days can be extended by court order, during which time the Company will be presenting its proposal to its creditors.
The increased divestiture value anticipated to be realized is based on the sale of non-core shut-in assets in the region in addition to the Alberta assets previously disclosed. Therefore, as reported on August 2, 2016, based on Quattro’s independent 2015 year end reserve report, the oil and gas assets being sold represent 40% of Quattro’s reserves and 35% of the Company’s lands, averaging approximately 750 boe/d and were assigned total proven reserves (1P) estimated at 2.68 million boe, valued at $22.5 million, within a land base of 212,997 acres (gross) or 147,576(net) acres (the “Properties”).
The conclusion of this process is anticipated to provide Quattro the ability to address all of its obligations to its creditors and materially improve Quattro's working capital upon the completion of its divestiture plan. The Company’s divestiture plan is to reduce the Company's liabilities by up to $18 million and increase its working capital to more than $12 million.
About Quattro Exploration and Production Ltd.
Quattro Exploration and Production Ltd. (“QXP”) continues to focus on the conventional exploration and development of oil and natural gas reserves in Western Canada, with an expanding presence in Alberta and BC. Our core low risk production base will provide us the capacity to aggressively pursue a series of high impact exploration and development efforts in Central and South America. The company intends to balance this portfolio of activities to assure its shareholders that it achieves material growth in both reserves and production.
This release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s registered filings which are available at www.sedar.com.
This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.
BOE presentation:
Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
Trading in the securities of Quattro Exploration & Production Ltd. should be considered highly speculative. 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.