Delphi Energy Corp. (“
Delphi” or
the “
Company”) announces that it has obtained an
order from the Court of Queen’s Bench of Alberta (the
“
Court”) granted in Delphi’s proceedings under the
Companies’ Creditors Arrangement Act (the “
CCAA”):
(i) extending the stay period to October 9, 2020, (ii) approving
interim financing arrangements intended to fund the Company’s
operations and expenses during the CCAA proceedings, and (iii)
approving a claims process with a claims bar date of July 10, 2020.
Interim financing arrangements will be provided
by ATB Financial pursuant to an interim letter of credit facility,
in an aggregate amount not to exceed $6.25 million, and by Luminus
Energy IE Designated Activity Company (“Luminus
Energy”), an affiliate of a pooled investment vehicle of
Luminus Management, LLC (“Luminus”), pursuant to
an interim loan facility, in an aggregate amount not to exceed
$13.5 million. ATB Financial and Luminus Energy have respectively
been granted third and fourth ranking super-priority charges over
the Company’s and its subsidiaries’ assets and property in
connection with such facilities. Luminus is a related party of
Delphi which, through one or more of its pooled investment vehicles
or affiliates thereof, holds 14,065,138 common shares, representing
approximately 57% of Delphi’s outstanding common shares, and
approximately $58.7 million principal amount of Delphi’s second
lien senior secured notes, representing approximately 49% of the
outstanding second lien senior secured notes.
The extension of the stay period to October 9,
2020 is expected to allow the Company time to pursue restructuring
efforts for the benefit of all stakeholders. The Company currently
intends to work toward developing a plan of compromise or
arrangement under the CCAA to be voted on by its creditors.
Update on Continuous Disclosure
Filings
As previously announced by Delphi, the Company
is relying on exemptive relief granted by Canadian securities
regulatory authorities that allows it to delay the filing of its
interim financial report for the interim period ended March 31,
2020 as required by section 4.4 of National Instrument 51-102 and
related management's discussion & analysis as required by
subsection 5.1(2) of National Instrument 51-102 (collectively, the
“Q1 Filings”) and estimates that the Q1 Filings will be available
for filing on or before June 29, 2020. Until such time as these
filings are made, Delphi’s management and other insiders are
subject to a trading blackout that reflects the principles
contained in section 9 of National Policy 11-207 – Failure-to-File
Cease Trade Orders and Revocations in Multiple Jurisdictions.
Except as previously announced by Delphi in connection with the
CCAA proceedings, there have been no material business developments
since the date of Delphi’s audited consolidated financial
statements for the years ended December 31, 2019 and 2018 that were
filed on March 12, 2020, a copy of which is available on SEDAR at
www.sedar.com.
Additional Information
Delphi and certain of its subsidiaries were
granted an initial order and protection under the CCAA on April 14,
2020. PricewaterhouseCoopers Inc. has been appointed by the Court
as monitor in the CCAA proceedings. Materials publicly filed in the
CCAA proceedings, including copies of the initial order of the
Court, are available on the monitor’s website at
http://www.pwc.com/ca/delphi. Delphi will continue to provide
updates regarding its restructuring as developments warrant.
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.
FOR FURTHER INFORMATION PLEASE
CONTACT:
DELPHI ENERGY CORP.2300 - 333 –
7th Avenue S.W.Calgary, AlbertaT2P 2Z1Telephone: (403) 265-6171
Facsimile: (403) 265-6207Email: info@delphienergy.ca Website:
www.delphienergy.ca
DAVID J. REIDPresident &
CEO
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 the expectation that the interim financing arrangements
will be sufficient to fund the Company’s operations and expenses
during the CCAA proceedings, expectations regarding the Company’s
ability to pursue restructuring efforts for the benefit of all
stakeholders and to develop a plan of compromise or arrangement
under the CCAA to be voted on by its creditors, and the expected
filing date for Delphi’s Q1 Filings. 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
ability of the Company to operate in the ordinary course during the
CCAA proceedings, including with respect to satisfying obligations
to service providers, suppliers, contractors and employees; the
ability of the Company to continue as a going concern; the
Company’s future liquidity position, and access to capital, to fund
ongoing operations and obligations; the ability of the Company to
stabilize its business and financial condition; the ability of the
Company to implement and successfully achieve its business
priorities; the ability of the Company to comply with its
contractual obligations, including, without limitation, its
obligations under debt arrangements; the general regulatory
environment in which the Company operates; the tax treatment of the
Company and the materiality of any legal and regulatory
proceedings; 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.
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).
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.
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.