Exall Energy Corporation Announces Letter of Intent with Viking Investments Group, Inc. for Loan Transaction
Feb 9 15
Exall Energy Corporation announced that, it is signed a non-binding letter of intent with Viking Investments Group Inc., pursuant to which Viking expressed interest in loaning Exall up to CAD 35 million to enable Exall to repay its indebtedness to the Alberta Treasury Branches. The LOI contemplates with respect to the proposed loan: Term - five years; Interest Rate is 8%, computed annually in arrears; Payments - interest only, paid annually or on other negotiated terms; Security - first ranking security interest over all of Exall's assets and undertaking. The loan transaction is subject to the parties executing a definitive agreement on or before February 25th, 2015, and is conditional upon, among other things, Viking having secured financing sufficient to allow Viking to advance the loan proceeds.
Exall Energy Corporation Reports Earnings and Operating Results for the Third Quarter and Nine Months Ended September 30, 2014; Provides Production Guidance for the Fourth Quarter of 2014; Plans to Drill Up to 3 Gross Development Wells in the Fourth Quarter of 2014
Nov 17 14
Exall Energy Corporation reported earnings and operating results for the third quarter and nine months ended September 30, 2014. For the quarter, the company reported net loss of $6,530,000 or $0.10 per diluted share on gross revenue of $5,372,000 compared to net loss of $373,000 or $0.01 per diluted share on gross revenue of $9,999,000 reported a year ago. Funds from operations were a negative of $153,000 or $0.0 per diluted share compared to funds from operations of $2,893,000 or $0.01 per diluted share reported a year ago. Capital expenditures, net, were $733,000 compared to $162,000 reported a year ago.
For the nine months, the company reported net loss of $8,579,000 or $0.13 per diluted share on gross revenue of $20,382,000 compared to net income of $874,000 or $0.01 per diluted share on gross revenue of $28,956,000 reported a year ago. Funds from operations were $2,563,000 or $0.01 per diluted share compared to funds from operations of $11,375,000 or $0.05 per diluted share reported a year ago. Capital expenditures, net, were $2,674,000 compared to $8,127,000 reported a year ago.
Production for the three month period ended September 30, 2014 averaged 656 boe per day, a 41% decrease from 1,116 boe per day for the same period in 2013. This decrease was primarily the result of the lack of drilling activity during the first nine months of 2014. Production was also negatively affected by a metering error, which resulted in Exall only injecting approximately 16% of the required injection to maintain pressure and production in the north end of the Mitsue Waterflood. The metering error was fixed in June of 2014 and the Company is just starting to see pressure increases and recovering production numbers. The company reported daily production of crude oil of 587 bbl, natural gas liquids of 39 bbl and natural gas of 182 mmcf compared daily production of crude oil of 1,030 bbl, natural gas liquids of 17 bbl and natural gas of 417 mmcf reported a year ago.
Production for the nine month period ended September 30, 2014 averaged 795 boe per day, a 33% decrease from 1,193 boe per day for the same period in 2013. This decrease was primarily the result of well cleanout operations performed during the first quarter of 2014, casing gas compressor issues resulting from the severe cold weather experienced during the first quarter of 2014 and the battery maintenance and well build up reporting requirements for the AER that were performed during the second quarter of 2014, which resulted in three weeks of lost production time. Additionally, production was negatively affected by the metering error. The company reported daily production of crude oil of 726 bbl, natural gas liquids of 27 bbl and natural gas of 251 mmcf compared daily production of crude oil of 1,110 bbl, natural gas liquids of 19 bbl and natural gas of 385 mmcf reported a year ago. Third quarter 2014 production was down 41% from the third quarter of 2013 period due primarily to the lack of drilling activity during the first nine months of the year.
Successful drilling on the Central Waterflood /North Waterflood channel extension through the last quarter of 2014 is expected to add 320 boepd net (based on an average working interest of 71.5%). Capital expenditures through the last quarter of 2014 will continue to focus on the "low-hanging fruit" opportunities. Short term focus of capital will be on well optimization and stimulation, waterflood implementation, and drilling of the lowest-risk, lowest-cost infill wells in the North Waterflood area.
The company plans to drill up to 3 gross development wells in the fourth quarter of 2014 with a further 5 gross development wells and 1 gross exploration well in 2015, subject to cash flow from operations. These wells are all high-impact, low risk locations identified through previous drilling and could have a significant impact on the company's production if successful. Continued drilling success on the North Waterflood channel extension will drive production growth on an annual basis through 2014 and 2015.
Exall Energy Corporation Provides Refinancing Update
Nov 5 14
Exall Energy Corporation announced that in order to complete the previously announced refinancing, it has entered into a forbearance agreement with its current senior Canadian lender. The Forbearance Agreement allows for a monitor to report on, amongst other information, the progress relating to the refinancing under a monitoring agreement, and the initiation of a formal sales process in relation to the Company and its assets. On taking these steps, and provided Exall meets all its obligations under the Forbearance Agreement and the Monitoring Agreement, Exall's senior Canadian lender has agreed to a forbearance period that could extend until up to February 13, 2015. Exall also announced that further to its October 6, 2014 announcement, one of the syndicate members that was providing the underlying funding for a debenture purchase agreement with a private Canadian lender is continuing the process that Exall expects will pay out Exall's existing facility with Exall's current senior Canadian lender in full, in consideration for an assignment of the Facility and the senior Canadian lender's security package. Exall expects that closing of this refinancing transaction will occur on or around November 14, 2014. If closing of the refinancing with the Lender is completed on the terms contemplated it would result in payment in full of all obligations owing to Exall's current senior Canadian lender and the Forbearance Agreement and the Monitoring Agreement would both terminate immediately. The Lender intends to complete the original Agreement by mid-November with Exall, at which time the interim lender will be paid out in full by replacing the Facility with a $35 million debenture, fully secured by Exall's assets. At that point the other related transaction described in the September 25, 2014 Exall press release, being the purchase of 15 million common shares of Exall, at 20 cents per share, for total gross proceeds to Exall of $3,000,000 under a private placement, is expected to close.