Baytex Announces Approval by Aurora Shareholders of its Acquisition and
CALGARY, ALBERTA -- (Marketwired) -- 05/21/14 -- Baytex Energy
Corp. ("Baytex") (TSX: BTE)(NYSE: BTE) provides an update on the
status of its proposed acquisition of all of the shares of Aurora Oil
& Gas Limited ("Aurora") pursuant to a scheme of arrangement under
Australian law (the "Arrangement"). At the scheme meeting held on May
21, 2014 at 9:30 a.m. (Perth time), the requisite majority of Aurora
shareholders approved the Arrangement.
Commenting on the shareholder vote, James Bowzer, President and Chief
Executive Officer, said: "We are very pleased to see that 88% of
Aurora shareholders voted in favor of the Arrangement and we look
forward to closing the Arrangement in the first half of June."
Aurora will now apply to the Federal Court of Australia for orders
approving the Arrangement at a hearing scheduled for May 26, 2014. If
the Arrangement is approved by the Court, Aurora expects to lodge the
Court orders approving the Arrangement with the Australian Securities
Investment Commission on Tuesday, May 27, 2014. Once this has
occurred, trading in Aurora shares is expected to cease at the close
of trade on May 27, 2014 on the Australian Securities Exchange and at
the open of trade on May 27, 2014 on the Toronto Stock Exchange.
Based on cash consideration payable for Aurora of A$4.20 (Australian
dollars) per share, the total purchase price is estimated at $2.8
billion (including the assumption of approximately $0.9 billion of
indebtedness). The acquisition enhances our growth and income
business model, delivers production and reserves per share growth and
provides attractive capital efficiencies for future investment. The
acquisition is accretive to our funds from operations while
maintaining a strong balance sheet.
We are acquiring premier acreage in the core of the liquids-rich
Eagle Ford, one of the leading shale oil plays in North America.
Aurora's primary asset consists of 22,200 net contiguous acres in the
prolific Sugarkane Field located in South Texas. Aurora's first
quarter 2014 gross production was 28,671 boe/d (81% liquids) of
predominantly light, high-quality crude oil.
The Sugarkane Field has been largely delineated with infrastructure
in place which is expected to facilitate future annual production
growth. In addition, these assets have significant future reserves
upside potential from well downspacing, improving completion
techniques and new development targets in additional zones.
To finance the acquisition of Aurora, we completed the issuance of
38,433,000 subscription receipts at $38.90 each on February 24, 2014,
raising gross proceeds of approximately $1.5 billion. The
subscription receipts currently trade on the Toronto Stock Exchange
under the symbol BTE.R.
Each subscription receipt entitles the holder thereof to receive, on
closing of the acquisition of Aurora, one common share of Baytex.
Upon closing of the acquisition, the holders of the subscription
receipts will be entitled to receive an amount per subscription
receipt equal to the dividends declared per common share from the
date of closing of the financing to the date of closing of the
acquisition. That amount is expected to be $0.88 per subscription
receipt, representing the four dividends declared from the date of
closing of the financing to the date of anticipated closing of the
We are committed to a growth and income model and its three
fundamental principles: delivering organic production growth, paying
a meaningful dividend and maintaining capital discipline. Through the
combination of an expanded inventory of high capital efficiency
projects and an improved outlook for heavy oil differentials, we
remain confident in our business plan going forward. Accordingly, we
have committed to increase the monthly dividend on our common shares
by 9% to $0.24 from $0.22 per share, subject to the completion of the
Arrangement. Based on the anticipated closing date, the dividend
increase is expected to take effect for the dividend payable to
holders of record on June 30, 2014.
Baytex announces that Mr. Raymond Chan is appointed non-executive
Chairman of the Board of Directors. Mr. Chan will continue to assist
management in key strategic issues and facilitate operations of the
board of directors.
The Board of Directors is pleased to announce the promotion of Mr.
Richard Ramsay to the position of Chief Operating Officer. Mr. Ramsay
joined Baytex as Vice President, Heavy Oil in January 2010, with
responsibilities for all heavy oil assets in Saskatchewan and
Alberta, including the company's core activities in the Peace River
region. In January 2012, Mr. Ramsay was appointed Vice President,
Alberta / B.C. Business Unit, which resulted in the combination of
the companies Peace River heavy oil assets with its conventional
properties in Alberta and British Columbia.
Mr. Ramsay is an accomplished executive, with over 25 years of
extensive experience in technical and managerial roles in oil and gas
development, operations, marketing and acquisitions. Under his
direction, production at Peace River has increased substantially from
9,000 Bbl/d to its current level of approximately 26,000 Bbl/d. Mr.
Ramsay has a Bachelor of Science degree with Distinction in
Mechanical Engineering from the University of Saskatchewan and is a
practicing member of the Association of Professional Engineers,
Geologists and Geophysicists of Alberta.
After over five years with Baytex, Marty Proctor the company's COO
will be leaving to pursue other opportunities. We appreciate Mr.
Proctor's significant contributions and wish him the best in his
The Board of Directors is also pleased to announce the promotion of
Mr. Ryan Johnson to the position of Vice President, Alberta / B.C.
Business Unit. Mr. Johnson joined Baytex in 2007 focusing on
technical responsibilities in northeast Alberta and southern
Saskatchewan, including the planning and execution of the company's
successful thermal SAGD project at Kerrobert. In January 2011, he was
appointed Senior Geologist of the Peace River region and has been an
integral member of the team responsible for the planning,
coordination and execution of multi-lateral exploitation and thermal
development of this top tier resource. In mid-2013, Mr. Johnson was
appointed Lead Geologist and charged with managing all key activities
across the entire Alberta / B.C. business unit.
Mr. Johnson is an accomplished leader with over fifteen years of
extensive technical and managerial roles in oil and gas exploration,
development, operations and prospect identification. Mr. Johnson has
a Bachelor of Science Degree (Honours) in Geology and Oceanography
from the University of British Columbia and is a practicing member of
the Association of Professional Engineers and Geoscientists of
The Board of Directors is also pleased to announce that Mr. Michael
Verm, current Chief Operating Officer of Aurora, will be joining
Baytex contingent on the closing of the acquisition of Aurora, as
Vice President and Managing Director of our Eagle Ford operations.
Mr. Verm has over 30 years of experience within the oil and gas
industry and has held a number of senior executive positions in North
America and internationally. Mr. Verm, a registered professional
engineer in Texas, graduated from Texas A&M with a petroleum
engineering degree and received his MBA from Oklahoma City
University. The addition of Mr. Verm to the Baytex leadership team
will help to ensure a smooth transition with the Eagle Ford asset and
personnel on closing of the Aurora acquisition.
In addition, Mr. Geoffrey Darcy has been promoted to the position of
Senior Vice President, Marketing and Mr. Brian Ector has been
promoted to the position of Senior Vice President, Capital Markets
and Public Affairs. Mr. Darcy joined Baytex in 2011 and was
previously Vice President, Marketing. Mr. Ector joined Baytex in 2009
and was previously Vice President, Capital Markets.
Advisory Regarding Forward-Looking Statements
All amounts are in Canadian dollars unless otherwise noted.
In the interest of providing Baytex's shareholders and potential
investors with information regarding Baytex, including management's
assessment of Baytex's future plans and operations, certain
statements in this press release are "forward-looking statements"
within the meaning of the United States Private Securities Litigation
Reform Act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation (collectively,
"forward-looking statements"). In some cases, forward-looking
statements can be identified by terminology such as "anticipate",
"believe", "continue", "could", "estimate", "expect", "forecast",
"intend", "may", "objective", "ongoing", "outlook", "potential",
"project", "plan", "should", "target", "would", "will" or similar
words suggesting future outcomes, events or performance. The
forward-looking statements contained in this press release speak only
as of the date thereof and are expressly qualified by this cautionary
Specifically, this press release contains forward-looking statements
relating to but not limited to: our business strategies, plans and
objectives; the anticipated benefits from the acquisition of Aurora,
including our beliefs that the acquisition will be an excellent fit
with our business model and will provide shareholders with exposure
to projects with attractive capital efficiencies; our expectations
that the Aurora assets have infrastructure in place that support
future annual production growth and that such assets will provide
material production, long-term growth and high quality reserves with
upside potential; anticipated effect of the acquisition of Aurora on
us, including our funds from operations; our expectations regarding
the effect of well downspacing, improving completion techniques and
new development targets on the reserves potential of the Aurora
assets; the timing of completion of the acquisition of Aurora; our
plans to establish new revolving credit facilities and a term loan
for us and a borrowing base facility for Aurora's U.S. subsidiary
following closing of the Arrangement; payment of the purchase price
for the acquisition of Aurora, including the use of proceeds from the
subscription receipt financing and our plans to draw on the new
revolving credit facilities and term loan; and our plan to increase
the dividend on our common shares upon completion of the acquisition
of Aurora. Cash dividends on our common shares are paid at the
discretion of our Board of Directors and can fluctuate. In
establishing the level of cash dividends, the Board of Directors
considers all factors that it deems relevant, including, without
limitation, the outlook for commodity prices, our operational
execution, the amount of funds from operations and capital
expenditures and our prevailing financial circumstances at the time.
These forward-looking statements are based on certain key assumptions
regarding, among other things: the receipt of regulatory, court and
shareholder approvals for the Arrangement; our ability to execute and
realize on the anticipated benefits of the acquisition of Aurora;
petroleum and natural gas prices and pricing differentials between
light, medium and heavy gravity crude oil; well production rates and
reserve volumes; our ability to add production and reserves through
our exploration and development activities; capital expenditure
levels; the receipt, in a timely manner, of regulatory and other
required approvals for our operating activities; the availability and
cost of labour and other industry services; the amount of future cash
dividends that we intend to pay; interest and foreign exchange rates;
the continuance of existing and, in certain circumstances, proposed
tax and royalty regimes; our ability to develop our crude oil and
natural gas properties in the manner currently contemplated; and
current industry conditions, laws and regulations continuing in
effect (or, where changes are proposed, such changes being adopted as
anticipated). Readers are cautioned that such assumptions, although
considered reasonable by Baytex at the time of preparation, may prove
to be incorrect.
Actual results achieved will vary from the information provided
herein as a result of numerous known and unknown risks and
uncertainties and other factors. Such factors include, but are not
limited to: the acquisition of Aurora may not be completed on the
terms contemplated or at all; failure to realize the anticipated
benefits of the acquisition of Aurora; closing of the acquisition of
Aurora could be delayed or not completed if we are unable to obtain
the necessary regulatory, court and shareholder approvals for the
Arrangement or any other approvals required for completion or, unless
waived, some other condition to closing is not satisfied; failure to
put in place a borrowing base facility for Aurora's U.S. subsidiary
following completion of the Arrangement; declines in oil and natural
gas prices; risks related to the accessibility, availability,
proximity and capacity of gathering, processing and pipeline systems;
variations in interest rates and foreign exchange rates; risks
associated with our hedging activities; uncertainties in the credit
markets may restrict the availability of credit or increase the cost
of borrowing; refinancing risk for existing debt and debt service
costs; a downgrade of our credit ratings; the cost of developing and
operating our assets; risks associated with the exploitation of our
properties and our ability to acquire reserves; changes in government
regulations that affect the oil and gas industry; changes in income
tax or other laws or government incentive programs; uncertainties
associated with estimating petroleum and natural gas reserves; risks
associated with acquiring, developing and exploring for oil and
natural gas and other aspects of our operations; risks associated
with large projects or expansion of our activities; risks related to
heavy oil projects; changes in environmental, health and safety
regulations; the implementation of strategies for reducing greenhouse
gases; depletion of our reserves; risks associated with the ownership
of our securities, including the discretionary nature of dividend
payments and changes in market-based factors; risks for United States
and other non-resident shareholders, including the ability to enforce
civil remedies, differing practices for reporting reserves and
production, additional taxation applicable to non-residents and
foreign exchange risk; and other factors, many of which are beyond
our control. These and additional risk factors are discussed in our
Annual Information Form, Annual Report on Form 40-F and Management's
Discussion and Analysis for the year ended December 31, 2013, as
filed with Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission.
The above summary of assumptions and risks related to forward-looking
statements in this press release has been provided in order to
provide shareholders and potential investors with a more complete
perspective on Baytex's current and future operations (if the
acquisition of Aurora is completed) and such information may not be
appropriate for other purposes. There is no representation by Baytex
that actual results achieved will be the same in whole or in part as
those referenced in the forward-looking statements and Baytex does
not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities law.
Baytex Energy Corp.
Baytex Energy Corp. is a dividend-paying oil and gas corporation
based in Calgary, Alberta. The company is engaged in the acquisition,
development and production of crude oil and natural gas in the
Western Canadian Sedimentary Basin and in the Williston Basin in the
United States. Approximately 89% of Baytex's production is weighted
toward crude oil. Baytex pays a monthly dividend on its common shares
which are traded on the Toronto Stock Exchange and the New York Stock
Exchange under the symbol BTE. The subscription receipts issued by
Baytex to fund a portion of the purchase price for Aurora Oil & Gas
Limited trade on the Toronto Stock Exchange under the symbol BTE.R.
Baytex Energy Corp.
Senior Vice President, Capital Markets and Public Affairs
Toll Free Number: 1-800-524-5521
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