CALGARY, Alberta, Nov. 2, 2012 /CNW/ - Equal Energy Ltd. ("Equal" or
"the Company") (TSX: EQU) (NYSE: EQU) is pleased to announce that it
has closed an agreement with another Canadian energy company whereby
Equal has sold its Lochend Cardium assets for cash consideration of $62
million, effective October 1st 2012. The assets sold include current production of approximately 525
boe/d (93% light oil) based on the most recent 30 day average, related
infrastructure and undeveloped land.
Equal will use the proceeds from the Lochend sale to fully repay the
amount outstanding on its credit facility and estimates that it will
have approximately $10 million in cash after the repayment. Net debt
will total approximately $35 million including outstanding convertible
debentures. In light of this disposition the Company's banking
syndicate is reviewing the limit on the Company's credit facility.
Equal estimates that the credit facility will be in the range of $110
million secured against the borrowing base of the Central Oklahoma
Equal's last remaining Canadian asset is represented by a royalty stream
of payments from producing wells in Western Canada. The Company will
continue to operate its Central Oklahoma assets consisting of
approximately 7,800 boe/d of liquids rich natural gas where strong
historical drilling success has been experienced. There is an
established inventory of future drilling locations and a staff of
experienced people in Oklahoma managing these assets. Management
believes that in addition to successful drilling, there is significant
additional upside from natural gas and NGL commodity price recovery.
The Company is still conducting its Strategic Review process and is
evaluating proposals for the sale of the remaining royalty assets
which, if sold, will represent an exit from all Canadian operations.
Equal's Special Committee of the Board of Directors and management are
moving to the final step in the Strategic Review Process to finalize
the go forward strategy for the Company. A Canadian Trust, US Master
Limited Partnership and an Exploration and Production Corporation are
all being considered. The make-up of the Board of Directors and
Executive Management team as well as an overall go forward manpower
plan will follow the Company structure decision. Equal expects to
conclude the Strategic Review process shortly after the conclusion of
the evaluation of the royalty proposals, likely by late November 2012.
Equal is being advised on the strategic review process by
Scotiabank. Desjardins Capital Markets is also advising Equal on the
strategic review process relating to Equal's Canadian assets.