Click here to close now.


News Feed Item

Waldron Energy Corporation Announces Sale of Gross Overriding Royalty for Total Proceeds of Seven Million Dollars

CALGARY, ALBERTA -- (Marketwired) -- 06/10/14 -- Waldron Energy Corporation (TSX:WDN) ("Waldron" or the "Corporation") is pleased to announce that it has entered into a purchase and sale agreement ("Agreement" or "Transaction") with Maple Leaf 2013 Oil & Gas Income Limited Partnership for total proceeds of $7 million to sell a 3% gross overriding royalty ("GORR") on its existing land base. The Agreement is subject to customary closing conditions and consents and is expected to close within two weeks. The effective date is June 10, 2014.

Transaction is Accretive to Waldron Shareholders

The Transaction crystallizes accretive value for the Corporation's shareholders and provides an immediate improvement to the balance sheet, as the proceeds from the sale of the GORR will be used to reduce total corporate indebtedness. The metrics of the deal are:

--  Based on the Corporation's December 31, 2013 GLJ Reserve Report, the
    transaction is valued at approximately Proved plus Probable at a 10%
    discount rate; and 
--  Based on annualized Q1 2014 revenue of $29.2 million, representing an
    annual GORR payment of $0.9 million, proceeds of the GORR sale represent
    an annual cash flow multiple of approximately 8.0X. 

The tables below summarize the implied valuation of the Corporation using the metrics of the Transaction, demonstrating the significant discount at which the Corporation currently trades:

Net Asset Value based on Transaction reserves valuation                     
Proved plus Probable NI 51-101 discounted at 10% at                         
 December 31, 2013 (2P Value)                               $     86,035,000
Approximate reduction to reserve value at December 31, 2013                 
 as a result of Transaction (2P Value)                           (6,500,000)
Net Debt at March 31, 2014 less proceeds from Transaction       (23,640,000)
Net Asset Value                                             $     55,895,000
Basic Common Shares Outstanding at May 31, 2014                   57,267,170
Net Asset Value - Basic (per share)(1)                      $           0.98
Current share price                                         $           0.29
Net Asset Value based on Transaction cash flow multiple                     
Proceeds from Transaction                                   $      7,000,000
Approximate increase to annual royalty expense as a result                  
 of Transaction                                                      870,000
Cash flow multiple from Transaction                                     8.0X
Q1 2014 annualized funds from operations ("funds flow")     $      8,940,000
Approximate reduction to funds flow as a result of                          
 Transaction (increased royalty expense)                           (870,000)
Approximate increase to funds flow as a result of                           
 Transaction (decreased interest expense)                            385,000
Revised Q1 2014 annualized funds from operations                   8,455,000
Cash flow multiple from Transaction                                     8.0X
Value of Corporation based on cash flow multiple from                       
 Transaction                                                $     67,640,000
Net Debt at March 31, 2014 less proceeds from Transaction       (23,640,000)
Net Asset Value                                             $     44,000,000
Basic Common Shares Outstanding at May 31, 2014                   57,267,170
Net Asset Value - Basic (per share)(1)                      $           0.77
Current share price                                         $           0.29


(1) Excludes the value of undeveloped lands and certain seismic data and does not incorporate changes in dilutives.

Transaction Highlights

--  3% GORR on all existing lands; 
--  Additional 7% GORR on two Ferrybank Falher wells yet to be drilled; 
--  If the Corporation fails to drill either of the two Ferrybank Falher
    horizontal wells, or a mutually agreed upon substitute, the Corporation
    will forfeit $750,000 per well of the $7 million advanced; and 
--  The Corporation has an option to purchase the GORR back for 15 months
    from the Agreement date at a price of 30% above the original proceeds on
    the Transaction less any royalties paid under the Agreement and less two
    thirds of any amounts forfeited as a result of any failure to drill the
    Ferrybank wells. 

Operations Update

Waldron has licensed a high impact liquids-rich natural gas Ferrybank Falher well, and is in the process of licensing a second location, and will drill the first well early in the third quarter of 2014. This well will offset a recent third-party drill which averaged over 3 mmcf per day of natural gas plus liquids over its first four months of initial production. If successful, the Corporation has multiple follow-up horizontal locations on adjacent 100% Waldron owned lands. The Corporation currently has no reserves booked to this opportunity.

Investor Information

Waldron is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the Toronto Stock Exchange under the trading symbol "WDN." Additional information regarding Waldron is available under the Corporation's profile at or at the Corporation's website,

About Maple Leaf

Maple Leaf Energy Income Limited Partnerships provide Canadian resident investors with energy sector investments. - See more at:

Forward-Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations.

Forward-looking statements typically use words such as "will," "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "should," "plan," and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may," "would," "could," or "will" be taken or occur in the future. Specifically, this press release contains forward-looking statements relating to the timing and closing of the Transaction; use of proceeds; results and timing of operations, including with regards to wells expected to be drilled; whether or not recent industry results are favorable; whether or not additional well licenses are obtained and additional reserves are recognized; whether or not the Corporation achieves guidance; the character and nature of the Corporation's asset base; whether or not the asset base is prospective; and number of horizontal drilling locations and opportunities and number of follow-up opportunities. The forward-looking statements are based on various assumptions including expectations regarding the timing and success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures and net proceeds of the Transaction; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; assumptions with regards to hedging activities; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; general economic conditions; delays resulting from or inability to obtain required regulatory approvals; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Waldron believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Waldron does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding Non-GAAP Measures

Funds from operations, operating netback and net debt are not recognized measures under IFRS as issued by the International Accounting Standards Board ("IASB"). Management believes that in addition to cash flow from operations and net earnings, funds from operations and operating netback are useful supplemental measures as they demonstrate the Corporation's ability to generate the cash necessary to fund future growth through capital investment or repay debt if incurred in future periods. The Company uses net debt (bank debt plus negative working capital or less positive working capital, both excluding bank debt) as an alternative measure of outstanding debt and is used as a measure to assess the Company's financial position. Investors are cautioned, however, that these measures should not be construed as an alternative to cash flow from operating activities or net earnings determined in accordance with IFRS as an indication of the Corporation's performance or financial position. The Corporation's method of calculating these measures may differ from other entities and, accordingly, they may not be comparable to measures used by other entities. For these purposes, the Corporation defines funds from operations as cash flow from operations before changes in non-cash operating working capital, transaction and other costs and decommissioning expenditures and defines operating netback as revenue, net of any realized gains or losses on commodity price contracts, less royalties, operating and transportation expenses. Net debt is defined as current assets less current liabilities, excluding commodity price contracts.

Note Regarding BOEs

The term barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

Waldron Energy Corporation
Ernie Sapieha
President & CEO
[email protected]

Waldron Energy Corporation
Jeff Kearl
VP Finance & CFO
[email protected]

Waldron Energy Corporation
Murray Stodalka
Chief Operating Officer
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
This week, the team assembled in NYC for @Cloud Expo 2015 and @ThingsExpo 2015. For the past four years, this has been a must-attend event for MetraTech. We were happy to once again join industry visionaries, colleagues, customers and even competitors to share and explore the ways in which the Internet of Things (IoT) will impact our industry. Over the course of the show, we discussed the types of challenges we will collectively need to solve to capitalize on the opportunity IoT presents.
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Today’s connected world is moving from devices towards things, what this means is that by using increasingly low cost sensors embedded in devices we can create many new use cases. These span across use cases in cities, vehicles, home, offices, factories, retail environments, worksites, health, logistics, and health. These use cases rely on ubiquitous connectivity and generate massive amounts of data at scale. These technologies enable new business opportunities, ways to optimize and automate, al...
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.
Containers are all the rage among developers and web companies, but they also represent two very substantial benefits to larger organizations. First, they have the potential to dramatically accelerate the application lifecycle from software builds and testing to deployment and upgrades. Second they represent the first truly hybrid-approach to consuming infrastructure, allowing organizations to run the same workloads on any cloud, virtual machine or physical server. Together, they represent a ver...
As operational failure becomes more acceptable to discuss within the software industry, the necessity for holding constructive, actionable postmortems increases. But most of what we know about postmortems from "pop culture" isn't actually relevant for the software systems we work on and within. In his session at DevOps Summit, J. Paul Reed will look at postmortem pitfalls, techniques, and tools you'll be able to take back to your own environment so they will be able to lay the foundations for h...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
For almost two decades, businesses have discovered great opportunities to engage with customers and even expand revenue through digital systems, including web and mobile applications. Yet, even now, the conversation between the business and the technologists that deliver these systems is strained, in large part due to misaligned objectives. In his session at DevOps Summit, James Urquhart, Senior Vice President of Performance Analytics at SOASTA, Inc., will discuss how measuring user outcomes –...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in high-performance, high-efficiency server, storage technology and green computing, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology is a premier provider of advanced server Building Block Solutions® for Data ...
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
SYS-CON Events announced today that Dyn, the worldwide leader in Internet Performance, will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Dyn is a cloud-based Internet Performance company. Dyn helps companies monitor, control, and optimize online infrastructure for an exceptional end-user experience. Through a world-class network and unrivaled, objective intelligence into Internet condit...
SYS-CON Events announced today that Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, will keynote at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA.
Saviynt Inc. has announced the availability of the next release of Saviynt for AWS. The comprehensive security and compliance solution provides a Command-and-Control center to gain visibility into risks in AWS, enforce real-time protection of critical workloads as well as data and automate access life-cycle governance. The solution enables AWS customers to meet their compliance mandates such as ITAR, SOX, PCI, etc. by including an extensive risk and controls library to detect known threats and b...
DevOps Summit, taking place at the Santa Clara Convention Center in Santa Clara, CA, and Javits Center in New York City, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait...
Overgrown applications have given way to modular applications, driven by the need to break larger problems into smaller problems. Similarly large monolithic development processes have been forced to be broken into smaller agile development cycles. Looking at trends in software development, microservices architectures meet the same demands. Additional benefits of microservices architectures are compartmentalization and a limited impact of service failure versus a complete software malfunction....