Twin Butte Energy completes acquisiton of private heavyoil producer Avalon Exploration
Aug 29, 2012
CALGARY, Aug. 29, 2012 /CNW/ - Twin Butte Energy Ltd. (TSX: TBE) ("Twin Butte") is pleased to announce that the acquisition of Avalon Exploration Ltd. ("Avalon") pursuant to a plan of arrangement under the Business Corporations Act (Alberta) (the "Acquisition") was completed today. Pursuant to the Acquisition, Twin Butte issued approximately 24.6 million common shares ("Twin Butte Shares") to acquire all of the outstanding securities of Avalon. After giving effect to the Acquisition, approximately 217.1 million Twin Butte Shares are outstanding. In connection with the completion of the Acquisition, Twin Butte's credit facility was increased from $205 million to $240 million.
Avalon, which was amalgamated with Twin Butte following completion of the Acquisition, was a private company with substantially all of its production being heavy oil from properties located in the greater Lloydminster area. The Acquisition effectively doubles Twin Butte's net undeveloped land position in the Lloydminster heavy oil fairway from approximately 77,000 to 162,000 acres and further establishes Twin Butte as a significant operator in the area. The Acquisition materially increases the size and scope of heavy oil lands and opportunities for Twin Butte which intends to use its financial flexibility to capitalize on its expanded low risk drilling inventory.
About Twin Butte
Twin Butte is a value oriented intermediate producer with a significant low risk, high rate of return drilling inventory focused on large original oil in place conventional heavy oil exploitation. With a stable low decline production base, Twin Butte is well positioned to live within cash flow while providing shareholders a sustainable dividend and moderate per share production growth potential over both the short and long term. Twin Butte is committed to continually enhance its asset quality while focusing on the sustainability of its dividend. The common shares of Twin Butte are listed on the TSX under the symbol "TBE"
Forward-Looking Statement Advisory
In the interest of providing Twin Butte's shareholders and potential investors with information regarding Twin Butte, including management's assessment of the future plans and operations of Twin Butte, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to the following: expectations of management regarding the Acquisition, including synergies resulting from the Acquisition and the effect of the Acquisition on Twin Butte.
With respect to forward-looking statements contained in this news release, Twin Butte has made assumptions regarding, among other things, the ability of Twin Butte to execute and realize on the anticipated benefits of the Acquisition. Although Twin Butte believes that the expectations reflected in the forward looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Twin Butte's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: incorrect assessment of the value of the Acquisition; failure to realize the anticipated benefits and synergies of the Acquisition; volatility in market prices for oil and natural gas; the general economic conditions in Canada, the U.S. and globally; and the other factors described under "Risk Factors" in Twin Butte's most recently filed Annual Information Form available in Canada at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this news release speak only as of the date of this news release. Except as expressly required by applicable securities laws, Twin Butte does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
SOURCE: Twin Butte Energy Ltd.
For further information:
Twin Butte Energy Ltd.
President and Chief Executive Officer
Tel: (403) 215-2040
Fax: (403) 215-2055
R. Alan Steele
Vice President, Finance, Chief Financial Officer and Corporate Secretary
Tel: (403) 215-2692
Fax: (403) 215-2055