**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
closed its previously announced financing comprised of the sale of
(i) 27,559,055 common shares issued at a price of $1.27 per common
share; and (ii) 30,000 senior secured Collateralized Exchange
Listed™ (“CEL”) Notes, each with a principal amount of $1,000 and a
10% coupon, for gross proceeds of approximately $65.3 million.
A syndicate of agents, led by Raymond James Ltd.
and co-led by AltaCorp Capital Inc., sold the common shares and
Raymond James, as sole agent, sold the CEL Notes, all on a private
placement basis. The common shares and CELTM Notes issued are
subject to a statutory hold period of four months plus one day from
the date of closing, in accordance with applicable securities
legislation. The majority of the financing was subscribed for
by a single US-based institutional investor. Delphi is pleased to
have a strategic investor who is constructive to Delphi’s
accelerated development plan at its Bigstone Montney asset and is
supportive of future consolidation opportunities in the area.
OUTLOOK
Funds from the financing will initially be used
to repay bank debt leaving the Company with an undrawn $80 million
credit facility. The enhanced liquidity will support Delphi’s
planned accelerated capital program and will allow the Company to
continue its Bigstone consolidation efforts, following up on its
previously announced acquisition of 22.5 net sections of Montney
rights.
Delphi plans to add a third rig in the fall and
double its planned drilling program for the remainder of 2017
through spring breakup in 2018, increasing the number of wells
drilled from 10 to 20 wells. The Company drilled six wells in each
of 2015 and 2016. The Company’s field operations remain active
after an abbreviated spring break up, with five (3.1 net) wells in
various stages of completion.
Drilling Program (# of wells) |
2015 |
2016 |
2017 |
2018 |
Historical and current budgets |
6 |
6 |
13 |
14 |
Expanded capital program |
- |
- |
3-5 |
4-8 |
Total Wells |
6 |
6 |
16-18 |
18-22 |
Although the full 2018 capital budget and
guidance will not be finalized and approved until the fourth
quarter of 2017, Delphi anticipates production in the fourth
quarter of 2018 to increase by approximately 40 percent, from its
current fourth quarter of 2017 expectation of 11,000 to 11,500
boe/d due to the expanded capital program. Run-rate
cash flow in the fourth quarter of 2018 is anticipated to be in the
context of $100 million to $110 million (assuming commodity pricing
similar to the Company’s 2017 guidance assumptions).Total debt to
cash flow ratio is anticipated to remain at or below the Company’s
target of 1.5 times through 2018.
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.
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 |
MARK D. BEHRMAN |
President & CEO |
CFO |
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 offering; impact of the
offering on Delphi’s liquidity and the benefits therefrom; the
expected increase to Delphi’s capital program; Delphi’s drilling
plans; expectations of the impact of an accelerated growth plan;
expected production; expected cash flow in the fourth quarter of
2018; and expected total debt to cash flow through 2018.
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.