/THIS PRESS RELEASE IS NOT FOR
PUBLICATION OR DISSEMINATION IN THE UNITED
STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE
A
VIOLATION OF UNITED STATES
SECURITIES LAW./
CALGARY, Oct. 6, 2017 /CNW/ - Manitok Energy Inc.
("Manitok") (TSXV: MEI) and Questfire Energy Corp.
("Questfire") (TSXV: Q.A) are pleased to provide additional
information to its press release dated July
5, 2017 where Manitok and Questfire had announced that they
had entered into a definitive agreement (the "Arrangement
Agreement") providing for the acquisition by Manitok of all the
issued and outstanding common shares of Questfire (the
"Questfire Shares") pursuant to a plan of arrangement under
the Business Corporations Act (Alberta) (the
"Acquisition"). Manitok and Questfire are continuing to
progress the transaction towards an anticipated closing on or
before October 31, 2017.
Update on Corporate Information
Below is a table of individual corporate information for both
Manitok and Questfire:
|
|
|
|
|
Manitok
|
Questfire
|
Shares
outstanding(1)
|
(MM)
|
363.7
|
22.8
|
|
|
|
|
Market
capitalization(2)
|
($MM)
|
$25.5
|
$3.0
|
Net debt as at June
30, 2017(3)
|
($MM)
|
$73.4
|
$52.9
|
|
|
|
|
Average Daily
Production for Six months
ended June 30, 2017 Production
|
(boe/d)
|
5,926 (62%
gas)
|
4,075 (77%
gas)
|
|
|
|
|
Gross
Reserves(4)
|
|
|
|
|
Proved Developed
Producing
|
(MMboe)
|
9.7 (59%
gas)
|
13.5 (66%
gas)
|
|
Proved
|
(MMboe)
|
17.0 (55%
gas)
|
17.6 (68%
gas)
|
|
Proved Plus
Probable
|
(MMboe)
|
28.2 (57%
gas)
|
28.9 (62%
gas)
|
|
|
|
|
NPV10% Before
Tax(4)
|
|
|
|
|
Proved Developed
Producing
|
($MM)
|
$114.9
|
$94.6
|
|
Proved
|
($MM)
|
$188.3
|
$113.6
|
|
Proved Plus
Probable
|
($MM)
|
$299.8
|
$170.2
|
|
|
|
|
Total Undeveloped
Land(5)
|
(000
acres)
|
336
|
93
|
|
|
|
|
(1)
|
Common Shares
outstanding for Manitok and Questfire as at September 20, 2017,
being the date that Manitok announced that it had completed its
acquisition of Corinthian Oil Corp. Manitok's Common Shares are
subject to certain post-closing adjustment pursuant to its
transaction with Craft Oil Ltd. and Corinthian Oil Corp.
|
(2)
|
Assumes Manitok Share
price of $0.07 and Questfire Share price of $0.13 as of October 5,
2017, being the closing price of Manitok Shares prior to the date
of this press release.
|
(3)
|
Net debt does not
have standardized meanings prescribed by generally accepted
accounting principles and therefore should not be considered in
isolation. These reported amounts and their underlying calculations
are not necessarily comparable or calculated in an identical manner
to a similarly titled measure of other companies where similar
terminology is used. Where these measures are used they should be
given careful consideration by the reader. Refer to the Non-GAAP
Measures paragraph in the Advisories section of this press
release.
|
(4)
|
Gross Reserves (gross
interest before royalties) and net present value numbers are based
on a reserves report prepared by Sproule Associates Ltd., Manitok's
independent qualified reserves evaluator, dated April 28, 2017 with
an effective date of December 31, 2016 (the "Manitok Report") and
the reserves report prepared by GLJ Petroleum Consultants Ltd.,
Questfire's independent qualified reserves evaluator, dated March
10, 2017 with an effective date of December 31, 2016 (the
"Questfire Report"). The full text of the Manitok Report and the
Questfire Report, including full summary of net present values of
future revenues associated with the applicable reserves using
applicable price forecast, before and after deducting income taxes,
and calculated without discount and using discount rates of 5%,
10%, 15% and 20%, are contained, and previously disclosed, in
Manitok's and Questfire's respective annual information forms for
the year ended December 31, 2016, which are available
electronically on Manitok's and Questfire's profile on SEDAR at
www.sedar.com. The Manitok Report and the Questfire Report have
been prepared in accordance with the definitions, standards and
procedures contained in the Canadian Oil and Gas Evaluation
Handbook and National Instrument 51-101 Standards of Disclosure
for Oil and Gas Activities. Gross reserves are Manitok's and
Questfire's working interest share before deduction of royalty
obligations and without including any royalty interests. Estimates
of future net revenues whether discounted or not do not represent
fair market value.
|
(5)
|
The undeveloped land
as at June 30, 2017 for Manitok and as at December 31, 2016 for
Questfire.
|
(6)
|
Readers should note
that the pro forma numbers and the adjusted-EBITDA numbers
presented by Manitok and Questfire in their joint press release
dated July 5, 2017 cannot be relied upon on a combined basis due to
Manitok and Questfire having different accounting procedures in
determining non-GAAP measures. See "Non-GAAP Financial Measures"
cautionary language at the end of this press release.
|
About Manitok
Manitok is a public oil and gas exploration and
development company focusing on Lithic Glauconitic light oil in
southeast Alberta and Cardium
light oil in west central Alberta.
The Corporation utilizes its expertise, combined with the latest
recovery techniques, to develop the remaining oil and liquids-rich
natural gas pools in its core areas of the Western Canadian
Sedimentary Basin.
Forward-looking Information Cautionary
Statement
This press release contains forward-looking statements. More
particularly, this press release contains statements concerning the
terms of the Acquisition.
The forward-looking statements in this press release are
based on certain key expectations and assumptions made by Manitok
and Questfire, including expectations and assumptions concerning
the prevailing market conditions, the intentions of their lenders,
commodity prices, and the availability of capital.
Although Manitok and Questfire believe that the expectations
and assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the
forward-looking statements because Manitok and Questfire can give
no assurance that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. These include,
but are not limited to, risks associated with adverse market
conditions, the inability of Manitok or Questfire to complete the
Acquisition at all or on the terms announced, not obtaining the
required court, shareholder and regulatory approvals, a lender not
approving the amendment to a credit facility and the risks
associated with the oil and gas industry in general (e.g.,
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
reserves estimates; the uncertainty of estimates and projections
relating to production, costs and expenses; and health, safety and
environmental risks), uncertainty as to the availability of labour
and services, commodity price and exchange rate fluctuations,
unexpected adverse weather conditions, general business, economic,
competitive, political and social uncertainties, capital market
conditions and market prices for securities and changes to existing
laws and regulations. More information about certain of these risks
are set out in the documents filed from time to time with the
Canadian securities regulatory authorities, available on Manitok's
and Questfire's SEDAR profiles at www.sedar.com.
Forward-looking statements are based on estimates and
opinions of management of Manitok and Questfire at the time the
statements are presented. Manitok and Questfire may, as considered
necessary in the circumstances, update or revise such
forward-looking statements, whether as a result of new information,
future events or otherwise, but Manitok and Questfire undertake no
obligation to update or revise any forward-looking statements,
except as required by applicable securities laws.
The estimates of reserves and future net revenue for
individual properties may not reflect the same confidence level as
estimates of reserves and future net revenue for all properties,
due to the effects of aggregation.
Non-GAAP Financial Measures
This press release contains a reference to "Net Debt". Such
measure does not have standardized meanings prescribed by generally
accepted accounting principles ("GAAP"), including
International Financial Reporting Standards ("IFRS") and
therefore should not be considered in isolation. Such reported
amount and the underlying calculation are not necessarily
comparable or calculated in an identical manner to a similarly
titled measure of other companies where similar terminology is
used. Where such measure is used it should be given careful
consideration by the reader. Such measure has been described and
presented in this press release in order to provide shareholders
and potential investors with additional information regarding the
Corporation's liquidity and to assess its financial
position.
For Manitok, Net Debt includes outstanding bank indebtedness
plus adjusted working capital deficit plus the senior secured notes
and the long-term financial obligations as per the period ended
June 30, 2017 and as disclosed in
Manitok's 2017 second quarter results. Adjusted working capital
deficit includes current assets less current liabilities excluding
the current portion of the amount drawn on the credit facilities,
the current portion of the fair value of financial instruments and
provisions. For Questfire, Net Debt includes their working
capital deficit and their long term contract obligation as per the
period ended June 30, 2017 and as
disclosed in Questfire's 2017 second quarter results.
Caution Respecting BOE
The term barrels of oil equivalent ("BOE") may be
misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf:1 Bbl and an Mcfe conversion ratio of 1 Bbl:6 Mcf
are based on an approximate energy equivalency conversion method
primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead. Since the value ratio based on
the current price of crude oil compared to natural gas is
significantly different from the energy equivalency conversion
ratio of 6:1, utilizing a conversion based on a 6:1 ratio is
misleading as an indication of value.
This press release shall not constitute an offer to sell
or the solicitation of an offer to buy any securities nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The securities
issued pursuant to the Acquisition and/or the financing described
herein may not be offered or sold in the
United States absent registration or applicable exemption
from the registration requirements.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Manitok Energy Inc.