CALGARY, AB, Nov. 13, 2020 /CNW/ - Highwood Oil Company Ltd.,
("HOCL", "Highwood" or the "Company") (TSXV:
HOCL) is pleased to announce that it has entered into an agreement
with an arm's-length Alberta
based, private oil and gas exploration and production company (the
"Purchaser") to divest of the Company's Red Earth field for
a total transaction value of $2 million cash, prior to
customary closing adjustments (the "Divestiture"). As part
of the Divestiture, the purchaser paid a $200,000 non-refundable deposit into trust to be
applied against the closing consideration. Current production from
the Red Earth field is approximately 1,000 bbl/d of oil.
The Divestiture is closed into escrow subject to regulatory
approval and license transfers. The Company anticipates
closing conditions being satisfied in late January 2021. The effective date of the
Divestiture is the closing date, being the 10th business
day following the date upon which regulatory approval is received.
The Divestiture does not include any working interest in the
Company's Wabasca Crude Oil Transmission Pipeline.
STRATEGIC RATIONALE
With the recent success of the Clearwater Fairway and its
drilling program, the Company considered the Red Earth assets to be
non-core in nature. The Divestiture allows the Company to
remove approximately $30.0 million of
undiscounted, uninflated decommissioning obligations from its
schedule of liabilities. Highwood is focusing on the higher netback
assets with lower operating costs.
ADVISOR
National Bank Financial Inc. acted as financial advisor to
Highwood with respect to the Divestiture.
Oil and Gas Measures
Readers should see the "Selected Technical Terms" in the
Annual Information Form filed on April 30,
2020 for the definition of certain oil and gas
terms.
Non-GAAP Measures
This press release refers to certain financial measures that
are not determined in accordance with GAAP. Since non-GAAP measures
do not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented
by other companies, securities regulations require that non- GAAP
measures are clearly defined, qualified and reconciled to their
nearest GAAP measure. Except as otherwise indicated, these non-GAAP
measures are calculated and disclosed on a consistent basis from
period to period. Specific adjusting items may only be relevant in
certain periods.
The intent of non-GAAP measures is to provide additional
useful information with respect to Highwood's operational and
financial performance to investors and analysts though the measures
do not have any standardized meaning under IFRS. The measures
should not, therefore, be considered in isolation or used in
substitute for measures of performance prepared in accordance with
IFRS. Other issuers may calculate these non-GAAP measures
differently.
Other Warnings
The Exchange has in no way passed upon the merits of the
proposed transaction and has neither approved nor disapproved the
contents of this press release.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this press
release.
This news release contains forward-looking statements
relating to the future operations of the Company and other
statements that are not historical facts. Forward-looking
statements are often identified by terms such as "will", "may",
"should", "anticipate", "expects" and similar expressions. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
the future plans and objectives of the Company, are forward-looking
statements that involve risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from the Company's expectations
include risks detailed from time to time in the filings made by the
Company with securities regulatory authorities.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of the Company and certain of may be
found under the heading "Risk Factors" in the Company's
AIF. The reader is cautioned not to place undue reliance on
any forward-looking information. Such information, although
considered reasonable by management at the time of preparation, may
prove to be incorrect and actual results may differ materially from
those anticipated. Forward-looking statements contained in this
news release are expressly qualified by this cautionary statement.
The forward-looking statements contained in this news release are
made as of the date of this news release and the Company will
update or revise publicly any of the included forward-looking
statements as expressly required by Canadian securities
law.
SOURCE Highwood Oil Company Ltd.