Connacher Oil and Gas Limited ("Connacher" or the "Company") announces its financial and operating results for the quarter- and year-ended December 31, 2016 (all amounts are in Canadian dollars unless otherwise noted).
As oil prices increased in the second half 2016 and 2017, the Company restored production on 16 of the 18 wells at Pod One which were previously suspended. Based on field estimates, Q1 2017 production was approximately 12,000 bbl/d.
The Company is expected to complete a turnaround at Algar by the end of Q2 2017.
Q4 2016 Highlights
YE 2016 Highlights
Companies' Creditors Arrangement Act ("CCAA") Announcement and Status
On May 17, 2016, the Company sought and obtained creditor protection under the Companies' Creditors Arrangement Act ("CCAA") pursuant to an order (the "Initial Order") granted by the Court of Queen's Bench of Alberta, Judicial Centre of Calgary (the "Court"). The Court granted CCAA protection for an initial period expiring on June 16, 2016. Since the Initial Order, five Court-ordered extensions of the stay period in the Initial Order have been obtained, with the most recent extending the stay of proceedings until and including June 30, 2017 (the "CCAA Stay Period").
Under the Initial Order, Ernst & Young Inc. was appointed by the Court as the monitor (the "Monitor").
The CCAA is a federal insolvency statute that allows an insolvent company which owes creditors in excess of $5 million to restructure its business and financial affairs and stays creditors and others from enforcing rights against the insolvent company.
The Initial Order also approved and authorized the Company and the Monitor to conduct a sale and investment solicitation process (the "SISP"), as set out in Schedule "A" to the Initial Order, to identify one or more purchasers and/or investors in the Company's business and/or property.
As authorized and approved by the Initial Order, the Company secured interim financing in the form of a senior secured debtor-in-possession credit facility (the "Interim Financing Credit Facility" or "DIP") from certain existing lenders certain of which are also significant shareholders of the Company (the "Interim Lenders") for up to US$20 million, with initial commitments of up to US$11.5 million (the "Initial Commitments").
On October 26, 2016, the Company entered into a Waiver, Approval, and Modification Agreement (the "Agreement") with the Interim Lenders related to the DIP. Pursuant to the Agreement, the Interim Lenders agreed to waive certain limited defaults under the DIP related to the CCAA SISP timelines and provided the Company with access to an additional amount of approximately US$5.0 million of the US$20 million DIP initially authorized by the Court to support the Company's continuing operations.
On December 16, 2016, the Company entered into a further Approval and Modification Agreement (the "Second Amendment Agreement") with the Interim Lenders related to the DIP. The Second Amendment Agreement extended the maturity date under the DIP from May 17, 2017 to December 31, 2017 and amends certain provisions of the DIP in order to provide the Company with greater flexibility to enter into hedging agreements and other long-term contracts.
Connacher is a Calgary-based in situ oil sands developer, producer, and marketer of bitumen. The Company holds a 100 per cent interest in approximately 447 million barrels of proved and probable bitumen reserves and operates two steam-assisted gravity drainage facilities located on the Company's Great Divide oil sands leases near Fort McMurray, Alberta.
SOURCE: Connacher Oil and Gas Limited
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