Quattro Increases Asset Divestiture Plan to $30 Million and is Granted Court Protection to Allow for Its Orderly Completion
August 11 2016 - 1:00PM
Quattro Exploration And Production Ltd. (TSXV:QXP)
("
Quattro" or the "
Company")
announced today an increase in its divestiture plan to $30,000,000
including its previously announced asset sale of $24,250,000 and
has filed a Notice of Intention to Make a Proposal (“
Notice
of Intention”) under the provisions of Part III of the
Bankruptcy and Insolvency Act (the “
BIA”). The
notice was filed by the Company in order to allow it the necessary
time to complete the previously announced asset sale and the sale
of additional non-core assets that are currently in process,
protecting Quattro and its assets from the claims of creditors and
others while the Company pursues these objectives.
The Company is also pleased to announce that it
is evaluating a number of financing proposals that are
complementary to its current lender’s continued funding of the
Quattro's business plan.
Pursuant to the Notice of Intention, Hardie and
Kelly Inc. has been appointed as the trustee in the Company's
proposal proceedings and will assist the Company in these
efforts.
The decision to file the Notice of Intention was
made by Quattro’s board of directors following aggressive actions
by certain of the Company’s trade creditors that have been limiting
the Company’s ability to execute its business plan in an orderly
manner.
A Notice of Intention permits the Company to
pursue the restructuring of its financial affairs through an
orderly and formal proposal process. The filing of the Notice of
Intention has the effect of imposing an automatic stay of
proceedings (“Stay”) that will protect the Company
and its assets from the claims of creditors and others. The initial
Stay period of 30 days can be extended by court order, during which
time the Company will be presenting its proposal to its
creditors.
The increased divestiture value anticipated to
be realized is based on the sale of non-core shut-in assets in the
region in addition to the Alberta assets previously disclosed.
Therefore, as reported on August 2, 2016, based on Quattro’s
independent 2015 year end reserve report, the oil and gas assets
being sold represent 40% of Quattro’s reserves and 35% of the
Company’s lands, averaging approximately 750 boe/d and were
assigned total proven reserves (1P) estimated at 2.68 million boe,
valued at $22.5 million, within a land base of 212,997 acres
(gross) or 147,576(net) acres (the “Properties”).
The conclusion of this process is anticipated to
provide Quattro the ability to address all of its obligations to
its creditors and materially improve Quattro's working capital upon
the completion of its divestiture plan. The Company’s divestiture
plan is to reduce the Company's liabilities by up to $18 million
and increase its working capital to more than $12 million.
About Quattro Exploration and Production
Ltd.
Quattro Exploration and Production Ltd. (“QXP”)
continues to focus on the conventional exploration and development
of oil and natural gas reserves in Western Canada, with an
expanding presence in Alberta and BC. Our core low risk
production base will provide us the capacity to aggressively pursue
a series of high impact exploration and development efforts in
Central and South America. The company intends to balance
this portfolio of activities to assure its shareholders that it
achieves material growth in both reserves and production.
www.qxp-petro.com
This release includes certain statements that
may be deemed “forward-looking statements”. All statements in this
release, other than statements of historical facts, that address
future production, reserve potential, exploration drilling,
exploitation activities and events or developments that the Company
expects are forward-looking statements. Although the Company
believes the expectations expressed in such forward looking
statements are based on reasonable assumptions, such statements are
not guarantees of future performance and actual results or
developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results
to differ materially from those in forward looking statements
include market prices, exploitation and exploration successes,
continued availability of capital and financing, and general
economic, market or business conditions. Investors are cautioned
that any such statements are not guarantees of future performance
and those actual results or developments may differ materially from
those projected in the forward-looking statements. For more
information on the Company, Investors should review the Company’s
registered filings which are available at www.sedar.com.
This news release shall not constitute an offer
to sell or the solicitation of any offer to buy, nor shall there be
any sale of these securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful. The securities
offered have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration or applicable exemption
from the registration requirements of the U.S. Securities Act and
applicable state securities laws.
BOE presentation:
Barrel ("bbl") of oil equivalent ("boe") amounts
may be misleading particularly if used in isolation. All boe
conversions in this report are calculated using a conversion of six
thousand cubic feet of natural gas to one equivalent barrel of oil
(6 mcf=1 bbl) and is based on an energy conversion method primarily
applicable at the burner tip and does not represent a value
equivalency at the well head.
Trading in the securities of Quattro Exploration
& Production Ltd. should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Leonard Van Betuw
President and Chief Executive Officer
Office (403) 984-3917 Ext.102
Direct Line (587) 228-7070
leonard@qxp-petro.com
Or
Tianda Dranchuk
Business Development
Office (403) 984-3917 Ext.107
tianda.d@qxp-petro.com