Trilogy Energy Corp. Announces Agreement to Sell Certain Duvernay Assets in the Kaybob Area for $60 Million and Provides an Update on Its Previously Announced Grande Prairie Area Disposition
Trilogy Energy Corp. ("Trilogy" or the "Company") (TSX:TET) is pleased to announce that it has entered into an agreement to sell certain Duvernay assets in the Kaybob area of Alberta and provide an update on its previously announced asset sale in the Grande Prairie area of Alberta.
Kaybob Duvernay Asset Sale
Trilogy has entered into a definitive agreement to sell approximately 9.75 net sections of Duvernay mineral rights in its Kaybob Duvernay play and its 11.0% interest in a non-operated gas plant for cash consideration of $60 million (before adjustments).
The predominantly non-operated Duvernay sale assets have an average production (net to Trilogy) of approximately 640 Boe/d (2.6 MMcf/d of natural gas and 200 Bbl/d of natural gas liquids) for the month of April, 2017. The transaction includes Trilogy's Total Proved Developed Producing reserves attributable to such assets of approximately 879 MBoe as of December 31, 2016, based on the year end reserves estimate completed by Trilogy's independent reserves evaluator. After completion of this sale, Trilogy will continue to hold a substantial land position in the Kaybob area Duvernay play with approximately 175 net sections (112,000 net acres) of land in areas prospective for Duvernay shale development.
The sale is effective May 1, 2017 and is expected to be completed on or about May 31, 2017.
Grande Prairie Area Asset Sale Update
Trilogy also confirms that its previously announced sale of certain Valhalla assets in the Grande Prairie area of Alberta for cash consideration of $50 Million (before adjustments) remains conditional pending purchaser's receipt of the Alberta Energy Regulator ("AER") approvals for the transfer of the wells, pipelines and facilities. The sale is effective May 1, 2017 and is expected to be completed by the end of May provided the AER approvals are received.
Proceeds from the sale of the two transactions described above will be applied to reduce Trilogy's indebtedness under its revolving credit facility. Upon closing of the Valhalla area asset sale, Trilogy's borrowing base will be reduced from $300 million to $290 million. Upon closing of the Duvernay asset sale, Trilogy's borrowing base will be reduced from $290 million to $285 million. Provided that both of these transactions close by the end of May, 2017, proforma, Trilogy will be drawn $175 million as at May 31, 2017 under its revolving credit facility leaving Trilogy with capacity of $110 million under such facility.
After positive first quarter operational results and factoring in the impact of the two above mentioned asset sales, Trilogy maintains its current average 2017 annual production guidance of 24,000 Boe/d.
Trilogy is a petroleum and natural gas-focused Canadian energy corporation that actively develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy's geographically concentrated assets are primarily high working interest properties that provide abundant low-risk infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy's common shares are listed on the Toronto Stock Exchange under the symbol "TET".
SOURCE: Trilogy Energy Corp.
The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.