CALGARY, AB, Nov. 5, 2020
/CNW/ - Crew Energy Inc. (TSX: CR) ("Crew" or the
"Company") is pleased to announce the second of two closings
of our previously announced strategic transaction with a third
party midstream company (collectively, the "Transaction"),
which was first announced on January 17,
2020. The Transaction is one of many innovative
value-creation initiatives Crew has undertaken to streamline our
asset base over the past several years. Over and above the proceeds
realized from the Transaction, the Company has successfully
generated more than $502 million
through portfolio optimization since 2014. These proceeds have
supported continued development of our high-quality Montney assets, including ongoing
returns-focused drilling and completions projects in our Septimus
and West Septimus ("Greater Septimus") areas. Consistent with our
track record, Crew plans to continue pursuing strategic, non-core
dispositions and other value-enhancing transactions designed to
further strengthen our long-term prospects.
Proceeds of $35 Million on
Second Closing
Concurrent with this second closing, Crew has received an
additional $35 million of cash
consideration in exchange for the disposition of another 11% net
working interest ("WI") in our Septimus and West Septimus
gas processing facilities located within Crew's northeast B.C.
("NEBC") Montney operations
at Greater Septimus (the "NEBC Facilities"). Under the
Transaction, Crew's total WI divestment in the NEBC Facilities
equaled 22%, generating combined proceeds of $70 million received in two phases. Further, Crew
has entered into a long-term processing arrangement with the
purchaser, under which the Company is expected to make annual
payments of approximately $6.36
million to the purchaser over a 20-year period. In
conjunction with the Transaction, Crew and the midstream company
plan to build on their strategic infrastructure alliance with the
goal of collaborating on future value creation opportunities.
Unrelated to the Transaction, Crew also exercised and recently
closed upon an option with a different third party to acquire a net
WI of approximately 16% in the NEBC Facilities for $11.7 million. As a result of this additional
transaction, Crew is expected to save approximately $5.9 million of annual processing fees on a
go-forward basis.
Based on the two transactions described above, the Company
realizes meaningful benefits, including:
- receipt of net cash proceeds totaling $58.3 million;
- retention of an approximate 23% net WI in, and operatorship of,
the NEBC Facilities;
- net effect of annual cost reductions of approximately
$3 million; and
- a remaining option to dispose of an additional 11.43% WI in the
NEBC Facilities for additional proceeds of up to $37.5 million exercisable between January 2021 and June
2023.
Crew is a growth-oriented oil and natural gas producer,
committed to pursuing sustainable per share growth and long term
value creation through development of its Montney resource located in northeast
British Columbia. Crew's common
shares are listed for trading on the Toronto Stock Exchange
("TSX") under the symbol "CR".
Forward-Looking Information and Statements
This news release contains certain forward–looking
information and statements within the meaning of applicable
securities laws. The use of any of the words "expect",
"anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" "forecast" and similar
expressions are intended to identify forward-looking information or
statements. In particular, but without limiting the
foregoing, this news release contains forward-looking information
and statements pertaining to the following: the benefits to
be derived from completion of the transactions described herein
including projected cost-savings resulting therefrom;; the
potential for Crew and the Purchaser to complete future
transactions pursuant to the strategic alliance described herein;
and the possible future disposition of an additional interest in
the NEBC Facilities pursuant to the excise of the option described
herein.
Forward-looking statements or information are based on a
number of material factors, expectations or assumptions of Crew
which have been used to develop such statements and information but
which may prove to be incorrect. Although Crew believes that
the expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because Crew can give no assurance that
such expectations will prove to be
correct.
The forward-looking information and statements included in
this news release are not guarantees of future performance and
should not be unduly relied upon. Such information and
statements, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to defer materially from
those anticipated in such forward-looking information or statements
including, without limitation, those risks identified herein and
certain other risks detailed from time-to-time in Crew's public
disclosure documents (including, without limitation, those risks
identified in this news release and Crew's Annual Information
Form).
The forward-looking information and statements contained in
this news release speak only as of the date of this news release,
and Crew does not assume any obligation to publicly update or
revise any of the included forward-looking statements or
information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities
laws.
SOURCE Crew Energy Inc.
