**Not for distribution to United States News
Services or Dissemination in the United States**
Delphi Energy Corp. (“Delphi” or the “Company”) is pleased to
announce that it has extended the term of its $80 million senior
secured revolving credit facility with a syndicate of banks, led by
Alberta Treasury Branches and including the Bank of Nova Scotia,
until May 29, 2018. Delphi’s credit facility is expected to be
largely undrawn upon closing of the recently announced Financing
Transaction.
This news release does not constitute an offer
to sell or a solicitation of any offer to buy the securities in the
United States. The securities offered have not been and will not be
registered under the U.S. Securities Act of 1933, as amended and
will not be offered or sold in the United States absent an
exemption from the registration requirements thereof.
About Delphi Energy Corp.
Delphi Energy Corp. is an industry-leading
producer of liquids-rich natural gas. The Company has
achieved top decile results through the development of our high
quality Montney property, uniquely positioned in the Deep Basin of
Bigstone, in northwest Alberta. Delphi continues to outperform key
industry players by improving operational efficiencies and growing
our dominant Bigstone land position in this world-class play.
Delphi is headquartered in Calgary, Alberta and trades on the
Toronto Stock Exchange under the symbol DEE.
Forward-Looking
Statements. This news release contains
forward-looking statements and forward-looking information within
the meaning of applicable Canadian securities laws. These
statements relate to future events or the Company’s future
performance and are based upon the Company’s internal assumptions
and expectations. All statements other than statements of present
or historical fact are forward-looking statements. Forward-looking
statements are often, but not always, identified by the use of any
of the words “expect”, “anticipate”, “continue”, “estimate”, “may”,
“will”, “should”, “believe”, "intends”, “forecast”, “plans”,
“guidance”, “budget” and similar expressions.
More particularly and without limitation, this
release contains forward-looking statements and information
relating to use of proceeds from the Financing Transaction and the
impact of the Financing Transaction on Delphi’s liquidity.
Furthermore, statements relating to “reserves”
are deemed to be forward-looking statements as they involve the
implied assessment, based on certain estimates and assumptions that
the reserves described can be profitable in the future.
The forward-looking statements and information
contained in this release are based on certain key expectations and
assumptions made by Delphi. The following are certain
material assumptions on which the forward-looking statements and
information contained in this release are based: the stability of
the global and national economic environment, the stability of and
commercial acceptability of tax, royalty and regulatory regimes
applicable to Delphi, exploitation and development activities being
consistent with management’s expectations, production levels of
Delphi being consistent with management’s expectations, the absence
of significant project delays, the stability of oil and gas prices,
the absence of significant fluctuations in foreign exchange rates
and interest rates, the stability of costs of oil and gas
development and production in Western Canada, including operating
costs, the timing and size of development plans and capital
expenditures, availability of third party infrastructure for
transportation, processing or marketing of oil and natural gas
volumes, prices and availability of oilfield services and equipment
being consistent with management’s expectations, the availability
of, and competition for, among other things, pipeline capacity,
skilled personnel and drilling and related services and equipment,
results of development and exploitation activities that are
consistent with management’s expectations, weather affecting
Delphi’s ability to develop and produce as expected, contracted
parties providing goods and services on the agreed timeframes,
Delphi’s ability to manage environmental risks and hazards and the
cost of complying with environmental regulations, the accuracy of
operating cost estimates, the accurate estimation of oil and gas
reserves, future exploitation, development and production results
and Delphi’s ability to market oil and natural gas successfully to
current and new customers. Additionally, estimates as to expected
average annual production rates assume that no unexpected outages
occur in the infrastructure that the Company relies on to produce
its wells, that existing wells continue to meet production
expectations and any future wells scheduled to come on in the
coming year meet timing and production expectations.
Commodity prices used in the determination of
forecast revenues are based upon general economic conditions,
commodity supply and demand forecasts and publicly available price
forecasts. The Company continually monitors its forecast
assumptions to ensure the stakeholders are informed of material
variances from previously communicated expectations.
Financial outlook information contained in this
release about prospective results of operations, financial position
or cash flows is based on assumptions about future events,
including economic conditions and proposed courses of action, based
on management’s assessment of the relevant information currently
available. Readers are cautioned that such financial outlook
information contained in this release should not be used for
purposes other than for which it is disclosed.
Although the Company believes that the expectations
reflected in such forward-looking statements and information are
reasonable, it can give no assurance that such expectations will
prove to be correct and such forward-looking statements should not
be unduly relied upon. Since forward-looking statements and
information address future events and conditions, by their very
nature they involve inherent known and unknown risks and
uncertainties. Delphi’s actual results, performance or
achievements could differ materially from those expressed in, or
implied by, these forward-looking statements and, accordingly, no
assurance can be given that any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do so, what benefits Delphi will derive therefrom. Should one
or more of these risks or uncertainties materialize, or should
assumptions underlying forward-looking statements prove incorrect,
actual results may vary materially from those currently anticipated
due to a number of factors and risks. These include, but are
not limited to, the risks associated with the oil and gas industry
in general such as operational risks in development, exploration
and production, delays or changes in plans with respect to
exploration or development projects or capital expenditures, the
uncertainty of estimates and projections relating to production
rates, costs and expenses, commodity price and exchange rate
fluctuations, marketing and transportation, environmental risks,
competition from others for scarce resources, the ability to access
sufficient capital from internal and external sources, changes in
governmental regulation of the oil and gas industry and changes in
tax, royalty and environmental legislation. Additional
information on these and other factors that could affect the
Company’s operations or financial results are included in the
Company’s most recent Annual Information Form and other reports on
file with the applicable securities regulatory authorities and may
be accessed through the SEDAR website (www.sedar.com).
Readers are cautioned that the foregoing list of
factors is not exhaustive. Furthermore, the forward-looking
statements contained in this release are made as of the date of
this release for the purpose of providing the readers with the
Company’s expectations for the coming year. The forward-looking
statements and information may not be appropriate for other
purposes. Delphi undertakes no obligation to update publicly
or revise any forward-looking statements or information, whether as
a result of new information, future events or otherwise, unless so
required by applicable securities laws. The forward-looking
statements contained in this release are expressly qualified in
their entirety by this cautionary statement.
Basis of Presentation. For the
purpose of reporting production information, reserves and
calculating unit prices and costs, natural gas volumes have been
converted to a barrel of oil equivalent (boe) using six thousand
cubic feet equal to one barrel. A boe conversion ratio of 6:1
is based upon an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the wellhead. This conversion conforms to the
Canadian Securities Administrators’ National Instrument 51-101 when
boes are disclosed. Boes may be misleading, particularly if
used in isolation.
As per CSA Staff Notice 51-327 initial test results and initial
production performance should be considered preliminary data and
such data is not necessarily indicative of long-term performance or
of ultimate recovery.
Non-IFRS Measures. The release
contains the terms “funds from operations”, “funds from operations
per share”, “net debt”, “net debt to funds from operations ratio”,
“operating netbacks” “cash netbacks” and “netbacks” which are not
recognized measures under IFRS. The Company uses these
measures to help evaluate its performance. Management
considers netbacks an important measure as it demonstrates its
profitability relative to current commodity prices and costs of
production. Management uses funds from operations to analyze
performance and considers it a key measure as it demonstrates the
Company’s ability to generate the cash necessary to fund future
capital investments and to repay debt. Funds from operations is a
non-IFRS measure and has been defined by the Company as cash flow
from operating activities before accretion on long term and
subordinated debt, decommissioning expenditures and changes in
non-cash working capital from operating activities. The Company
also presents funds from operations per share whereby amounts per
share are calculated using weighted average shares outstanding
consistent with the calculation of earnings per share. Delphi’s
determination of funds from operations may not be comparable to
that reported by other companies nor should it be viewed as an
alternative to cash flow from operating activities, net earnings or
other measures of financial performance calculated in accordance
with IFRS. The Company has defined net debt as the sum of
long term debt and subordinated debt plus/minus working capital
excluding the current portion of the fair value of financial
instruments. Net debt is used by management to monitor remaining
availability under its credit facilities. Net debt to funds from
operations ratio is defined as net debt to annualized quarterly
funds from operations, based on the most recently completed
quarter. This ratio is used to calculate the Company’s compliance
with its net debt to funds from operations ratio covenant.
Operating netbacks have been defined as revenue less royalties,
transportation and operating costs. Cash netbacks have been
defined as operating netbacks less interest and general and
administrative costs. Netbacks are generally discussed and
presented on a per boe basis.
FOR FURTHER INFORMATION PLEASE CONTACT:
DELPHI ENERGY CORP.
300, 500 – 4 Avenue S.W.
Calgary, Alberta
T2P 2V6
Telephone: (403) 265-6171 Facsimile: (403) 265-6207
Email: info@delphienergy.ca Website: www.delphienergy.ca
DAVID J. REID
President & CEO
MARK D. BEHRMAN
CFO