PETRUS RESOURCES ANNOUNCES TERMINATION OF PREVIOUSLY ANNOUNCED DISPOSITION AND OPERATIONS UPDATE
April 01 2020 - 6:00AM
Petrus Resources Ltd. ("Petrus" or the "Company") (TSX: PRQ)
announces the termination of its previously announced disposition
of its oil and natural gas interests in the Foothills area (the
"Disposition").
Petrus has been advised in writing by the
purchaser that they are terminating the asset purchase and sale
agreement (the "Agreement") providing for the Disposition.
The Disposition was to be for total consideration of $1.8 million,
subject to customary closing conditions and adjustments.
Concurrent with the signing of the Agreement, the purchaser
deposited $90,000 with an escrow agent which will now be released
to Petrus pursuant to the terms of the Agreement.
OPERATIONS UPDATEWith the
recent extreme collapse in oil prices, Petrus is actively assessing
its future capital plans. The Board of Directors of Petrus
sets its capital budget on a quarterly basis instead of an annual
basis in order to reduce capital commitments to shorter time frames
given the increasing volatility in the energy industry. This
approach allows Petrus to protect its balance sheet in more
real-time and allows the Company to focus on its primary objective
of quarterly debt reductions.
Based on Petrus’ high working interest and
control of its infrastructure system, Petrus is able to decrease or
increase capital development spending with very limited lead
time. Similar to its peers, the Company's future drilling
plans are expected to be significantly reduced to protect the
balance sheet. Petrus does not currently expect any
significant capital spending in the second quarter and will
continue to evaluate future capital plans as time
progresses.
Petrus' first quarter capital spending has been
completed with the drilling and completion of 2 (2.0 net) Cardium
oil wells. The wells are currently on production at very
restricted production rates given the current low commodity price
environment.
Petrus utilizes financial derivative contracts
to mitigate commodity price risk and provide stability and
sustainability to the Company's funds flow and capital development
plan. As a percentage of fourth quarter 2019 production, Petrus has
derivative contracts in place for 59% at an average price of $75.35
CAD/bbl and 41% at an average price of $1.74 CAD/mcf, of its oil
and natural gas production, respectively, for 2020.
ABOUT PETRUSPetrus is a public
Canadian oil and gas company focused on property exploitation,
strategic acquisitions and risk-managed exploration in
Alberta.
For further information, please
contact:Neil Korchinski, P.Eng.President and Chief
Executive OfficerT: 403-930-0889E:
nkorchinski@petrusresources.com
ADVISORIES
Forward-Looking
Statements
Certain information regarding Petrus set forth
in this press release contains forward-looking statements within
the meaning of applicable securities law, that involve substantial
known and unknown risks and uncertainties. The use of any of the
words “anticipate”, “continue”, “estimate”, “expect”, “may”,
“will”, “project”, “should”, “believe” and similar expressions are
intended to identify forward-looking statements. In
particular, forward-looking statements in this press release
include statements with respect to the release of the deposit to
Petrus, the Company's approach to setting its budget and the
rationale therefor and the expected capital spending for the second
quarter of 2020. Such statements represent Petrus’ internal views
about future events. These statements are only predictions and
actual events or results may differ materially. Although Petrus
believes that the expectations reflected in the forward-looking
statements are reasonable, it cannot guarantee future results or
achievement since such expectations are inherently subject to
significant business, economic, competitive, political and social
uncertainties and contingencies. Many factors could cause Petrus’
actual results to differ materially from those expressed or implied
in any forward-looking statements made by, or on behalf of,
Petrus.
These forward-looking statements are subject to
certain risks and uncertainties, some of which are beyond the
Company’s control, including the impact of general economic
conditions; the impact of COVID-19; volatility in market prices for
crude oil, NGL and natural gas; industry conditions; currency
fluctuation; any future asset dispositions; the utilization of
financial derivative contracts; and other risks.
These forward-looking statements are made as of the date of this
press release and the Company disclaims any intent or obligation to
update any forward-looking statements, whether as a result of new
information, future events or results or otherwise, other than as
required by applicable securities laws.
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