Exploration & Production | General News | Deals - Acquisition, Mergers, Divestitures

Anderson to Shed Canadian Assets as Part of Strategic Alternatives Process

Share Print Bookmark    |    Monday,September 16,2013

Anderson Energy Ltd. has reported the following update of its strategic alternatives process.

Anderson has entered into an agreement to sell its Garrington and Ferrier Cardium oil and natural gas properties for $82 million effective August 1, 2013, subject to normal closing adjustments. In August, these properties produced approximately 1,000 BOED (65% oil & NGL). Closing of the Transaction is scheduled to occur by the end of October 2013.

Proceeds from the Transaction will initially be used to repay bank debt. On a pro forma basis at September 13, 2013, before closing adjustments, this would leave the Company with approximately $24 million in cash, assuming current drawn bank debt of $57 million and $1 million in transaction costs.

The properties to be sold represent approximately 34% of the Company's 2013 second quarter BOED production.

Future horizontal oil development drilling opportunities exist on Anderson's remaining Cardium properties at Willesden Green, West Pembina and Buck Lake and the Company continues to evaluate its Second White Specks acreage. Anderson is currently assessing the best strategy for the use of proceeds from the property sale. When the Transaction closes, the Company will provide another update on the strategic alternatives process. The continued development of the Company's oil and gas assets is dependent on the ability of the Company to secure sufficient funds through operations, bank facilities and other sources from the strategic alternatives process. Strategic alternatives may include, but are not limited to, continued development of its Cardium oil properties, the sale of additional assets or a drilling joint venture, either in one transaction, or in a series of transactions, the outright sale of the Company, or a merger or other strategic transaction involving Anderson or a third party.

Since the process began in 2012, the Company will have, upon completion of the Transaction:

• sold or agreed to sell over $150 million of assets;
• reduced bank debt from $106.7 million at March 31, 2012 to nil;
• restructured all of its shallow gas and Cardium drilling commitments so that by the end of January 2013, Anderson had completed all of its drilling commitments;
• demonstrated the improved production performance from slick water fracture stimulation; and
• continued to be an industry leader in low capital costs in the Cardium horizontal light oil play.

It is Anderson's current intention to not disclose developments with respect to the strategic alternatives process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is necessary in accordance with applicable law. The Company cautions that there are no assurances or guarantees that the process will result in a transaction or, if a transaction is undertaken, the terms or timing of such a transaction or the impact it will have on the Company's financial position. The Company has not set a definitive schedule to complete the evaluation.