CALGARY, ALBERTA–(Marketwired – Jan. 6, 2016) – Arsenal Energy Inc. (“Arsenal” or the “Company”) (TSX:AEI)(OTCQX:AEYIF)
Arsenal announces that its syndicate of lenders has completed its semi-annual review of the Company’s Credit Facility. The lenders have approved a facility of $55.0 million consisting of a $30.0 million conforming Extendible Syndicated Credit Facility, a $10.0 million Extendible Operating Facility and a $15.0 million Supplemental Facility. Arsenal is currently drawn at approximately $51 million on its credit facility.
The Company is currently providing information and data to its independent petroleum engineer and expects the results of the evaluation to be available in mid-February 2016. The new independent petroleum engineering report will form the basis for the annual borrowing base review to be completed by May 31, 2016.
During Q4 2015, the Company fulfilled the remaining expenditure commitments under the terms of the flow-through shares issued in 2014. The Company drilled five gross (4.4 net) wells in the quarter. Preliminary indicated results are 1.7 net oil wells, 1.7 net natural gas wells and one net dry and abandoned.
Given the Company’s financial position and current low oil prices, the Company is suspending further dividend payments. In addition, capital spending in the first six months of 2016 is expected to be restricted to the tie in of four gross (3.4 net) wells at Princess, Alberta and the equipping of six gross (0.9 net) wells at Lindahl in North Dakota. The Company has reduced general and administrative expenses by 20% in 2015 and expects to reduce these expenses by a further 20% in 2016.
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Forward Looking Statements
This 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 other similar expressions.
More particularly and without limitation, this release contains forward-looking assumptions, statements and information and expectations as to general and administrative costs and expectations as to capital expenditures and planned capital spending, future liquidity and Arsenal’s ability to fund ongoing capital requirements through operating cash flows and its credit facilities, the timing and success of development activities and cash availability for the financing of capital expenditures,
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. Arsenal’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 Arsenal 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 factors and risks include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development and production, delays or changes in plans with respect to development projects or capital expenditures, 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).
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. The forward-looking statements and information may not be appropriate for other purposes. Arsenal 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.