Bengal Energy Announces Term Sheet for a US$20 Million Secured
Credit Facility and Provides 2014 Cuisinier Exploration Program
Update
CALGARY, ALBERTA--(Marketwired - May 27, 2014) - Bengal Energy
Ltd. (TSX:BNG) ("Bengal" or the "Company") is pleased to announce
that it has signed an indicative term sheet for a US $20.0 million
secured credit facility (the "Facility") with a leading Australian
commercial bank (the "Lender"), and provides an update on its
Cuisinier exploration program.
US $20 Million Secured
Credit Facility
The Facility contemplates a borrowing base of up to US $20
million, over a three year term at attractive fixed income market
rates tied to USD LIBOR to fund its ongoing Australian development.
The Company has thoroughly stress tested its existing production
base to ensure that this Facility and Bengal's existing unsecured
debt are fully serviceable in multiple commodity price
scenarios.
The initial draw on the Facility will fund past costs associated
with the Company's Cuisinier Phase 1 drilling program and further
draws are expected to fully fund its Australian development through
March 2015 as well as anticipated future development. With the
Facility in place, Management expects to be able to fund future
planned exploration activities in India and Australia through
internally generated cash flows.
The Facility remains subject to the completion of due diligence
by the Lender and the entering into of a final Offer to Finance
with Bengal and will remain open for a fixed period to allow Bengal
to review other competitive lending proposals received. Management
expects an average cost of capital over the term of its finalized
Facility to be within the range of five to seven percent.
"The establishment of a reserve-based facility by a leading
international bank provides another milestone in the development of
Bengal's world-class Cuisinier oil play. The Facility provides
greater financial flexibility and enhanced predictability of our
free cash flow," said Chayan Chakrabarty, Bengal's President and
CEO. "Together with our existing cash flow and working capital,
this Facility will provide us with the capital needed to fund our
ongoing capital program, offer us the flexibility to finance
additional development opportunities, and free up internally
generated cash flows for the financing of other potential
exploration opportunities in Australia and India."
Bengal's existing CAD $8 million (10% coupon) and CAD $1.8
million (10% coupon) unsecured notes remain outstanding with
maturities on July 31, 2015 and January 31, 2016 respectively.
Cuisinier 2014
Exploration Program Update
As previously announced, Bengal and its joint venture partners
plan to drill two exploration wells in the second and third
quarters of calendar 2014 in the Cuisinier (Barta Sub Block, ATP
752) area. These two exploration wells will target both the
Cuisinier-type productive Murta zone, as well as the deeper
Birkhead and Hutton zones. The Birkhead and Hutton formations have
shown initial production rates ranging from 500 to over 1,000 Bopd
in other Cooper Basin analog pools.
The first well is currently scheduled to spud in early June,
with the second well planned for mid-August 2014. Both wells will
target independent structural closures within the Company's
Cuisinier North 3D area immediately adjacent to the Cook and
Cuisinier oil fields.
In addition, Bengal expects to participate in a number of well
stimulation interventions in the Cuisinier Pool expected to
increase production rates from selected wells. This well
stimulation program is expected to take place during the third and
fourth quarters of this calendar year.
The Company also anticipates the completion and tie-in of its
four remaining development wells drilled at Cuisinier to begin in
mid-July, and brought on-line in September 2014.
Bengal also advises that an updated presentation will be posted
on the Company's website on May 30, 2014, containing additional
information about its operations and strengthened financial
position.
About Bengal
Bengal Energy Ltd. (TSX:BNG) is an international oil and gas
exploration and production company with producing and prospective
light oil‐weighted assets in Australia and India. Bengal offers
exposure to lower risk, current production and cash flow, combined
with longer‐term high, potential impact exploration projects. The
Company's strategy is to achieve per share growth in cash flow,
production and reserves while establishing an attractive portfolio
of future drilling and exploration opportunities.
Additional information is available on our website at
www.bengalenergy.ca.
Forward-Looking Statements
This news release contains certain forward-looking
statements or information ("forward-looking statements") as defined
by applicable securities laws that involve substantial known and
unknown risks and uncertainties, many of which are beyond Bengal's
control. These statements relate to future events or our future
performance. All statements other than statements of historical
fact may be forward looking statements. The use of any of the words
"plan", "expect", "prospective", "project", "intend", "believe",
"should", "anticipate", "estimate", or other similar words or
statements that certain events "may" or "will" occur are intended
to identify forward-looking statements. The projections, estimates
and beliefs contained in such forward looking statements are based
on management's estimates, opinions, and assumptions at the time
the statements were made, including assumptions relating to: the
impact of economic conditions in North America, Australia, India
and globally; industry conditions; changes in laws and regulations
including, without limitation, the adoption of new environmental
laws and regulations and changes in how they are interpreted and
enforced; increased competition; the availability of qualified
operating or management personnel; fluctuations in commodity
prices, foreign exchange or interest rates; stock market volatility
and fluctuations in market valuations of companies with respect to
announced transactions and the final valuations thereof; results of
exploration and testing activities; and the ability to obtain
required approvals and extensions from regulatory authorities. We
believe the expectations reflected in those forward-looking
statements are reasonable but, no assurances 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 that
Bengal will derive from them. As such, undue reliance should not be
placed on forward-looking statements. Forward-looking statements
contained herein include, but are not limited to, statements
regarding: the entering into a US$20 million credit facility, the
timing to drill two exploration wells in Cuisinier North 3D area,
conducting select well stimulations, the timing to complete and
tie-in four wells at Cuisinier and the realization of the impact of
such new production. The forward looking statements
contained herein are subject to numerous known and unknown risks
and uncertainties that may cause Bengal's actual financial results,
performance or achievement in future periods to differ materially
from those expressed in, or implied by, these forward-looking
statements, including but not limited to, risks associated with:
the failure to obtain required regulatory approvals or extensions;
failure to satisfy the conditions under farm-in and joint venture
agreements; failure to secure required equipment and personnel;
changes in general global economic conditions including, without
limitations, the economic conditions in North America, Australia,
India; increased competition; the availability of qualified
operating or management personnel; fluctuations in commodity
prices, foreign exchange or interest rates; changes in laws and
regulations including, without limitation, the adoption of new
environmental and tax laws and regulations and changes in how they
are interpreted and enforced; the results of exploration and
development drilling and related activities; the ability to access
sufficient capital from internal and external sources; and stock
market volatility. Further, certain noted production information
provided in this press release may constitute "analogous
information" under applicable securities legislation, such as
production rates from wells drilled by other industry participants
located in geographical proximity to lands held by the Company.
This information is derived from publicly available information
sources that the Company believes are predominantly independent in
nature however readers are cautioned that the information may be in
error, may not be analogous to the Company's land holdings and/or
may not be representative of actual results of wells anticipated to
be drilled or completed by the Company in the future. Readers are
encouraged to review the material risks discussed in Bengal's
Annual Information Form under the heading "Risk Factors" and in
Bengal's annual MD&A under the heading "Risk Factors". The
Company cautions that the foregoing list of assumptions, risks and
uncertainties is not exhaustive. The forward-looking statements
contained in this news release speak only as of the date hereof and
Bengal does not assume any obligation to publicly update or revise
them to reflect new events or circumstances, except as may be
require pursuant to applicable securities laws.
Bengal Energy Ltd.Chayan ChakrabartyPresident & Chief
Executive Officer(403) 205-2526Bengal Energy Ltd.Jerrad
BlanchardChief Financial Officer(403)
205-2526investor.relations@bengalenergy.cawww.bengalenergy.ca
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