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Alange Energy announces share consolidation and name change to Petromagdalena
http://tmx.quotemedia.com/article.php?newsid=42989794&qm_symbol=PMD
Here is the news.
Alange Energy Announces Update on Internal Review Process, a Production Update and Appointment of New Director
Mar. 7, 2011 (PR Newswire) --
TORONTO, March 7 /PRNewswire-FirstCall/ - Alange Energy Corp. (TSXV: ALE) announced today an update on its internal review process, which is still ongoing:
The Company has terminated, without liability or further obligation, the "pipeline without a pipe" strategy for the direct export of its oil to the "Cartagena Oil Export Platform" which did not prove to be cost effective given the Company's current or anticipated levels of production. This platform included a sales agreement with Arcadia Petroleum Limited and Colombiana de Distribucion y Servicio CI S.A ("Codis") and three-year contracts with each of Transporte Sanchez Polo S.A. for the trucking of oil and with Codis for storage and port handling services in Cartagena. The Company has implemented a more conventional marketing contract with Pacific Rubiales Energy Corp. to significantly improve its netback per barrel, relative to the previous Cartagena Oil Export Platform, by selling its crude oil from Cubiro into the international market under a straightforward FOB ("Freight on Board") pricing model, without a minimum load requirement, through multiple delivery points to the existing Colombian pipeline infrastructure.
Management has continued to take steps to reduce the Company's ongoing G&A. To date, staff reductions include 10 senior managers, 20 support staff and 19 technical consultants. The Company has also cancelled the contract of a local public relations firm in Colombia. Management is continuing to review other contracts and activity-based spending to identify further cost savings.
To date, the Company has repaid $9 million of its long-term debt and is currently in the process of finalizing repayment of a further $22 million of credit line borrowings and long-term debt. The funding for these debt repayments was provided through the recently completed C$70 million equity financing. By the end of March, the Company expects to have only one long-term debt facility of approximately $12 million following the debt repayments.
The Company's share of production, before deduction of royalties, averaged 2,374 barrels of oil equivalent ("boe") per day in December 2010. The Company's production averaged 2,181 boe per day and 2,310 boe per day for January and February, respectively. Production at Cubiro during the first two months of 2011 has been impacted by trucking disruptions affecting many of the operators in the Llanos Basin. Oil represents approximately 88% of the Company's total share of production (before royalties) through the first two months of 2011.
The transfer of operatorship of Topoyaco to Pacific Rubiales Energy Corp. was completed and did not result in any payment or compensation. Although no longer the operator, Alange Energy retains its full economic interest of 50% in the block.
Further, the Company is pleased to announce the appointment of Mr. Ian Mann as an independent director to its board, effective immediately.
Mr. Mann is currently the President of Meridian Fund Managers Ltd., a BVI-registered fund manager that oversees two alternative investment funds primarily focused on global mining and oil and gas companies. Prior to 2003, Mr. Mann held senior management and partner positions with several Bermuda-based companies. He has over ten years of corporate governance experience as a non-executive Director of two Canadian-listed mining companies, L.G.R. Resources Inc. and Franc Or Resources Ltd. He holds an Honours Business Administration degree from The University of Western Ontario.
Mr. Mann joins the board to replace Mr. Boris Abad, who resigned on February 10, 2011; the appointment of Mr. Mann remains subject to regulatory approval.
The Company will be releasing its fourth quarter and year-end results on April 28, 2011. An updated reserves report, prepared in accordance with National Instrument 51-101, will be issued in conjunction with the financial results. It is expected that the internal review process will continue, and be concluded, by this date.
About Alange Energy Corp.
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.
All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy Corp. ("Alange Energy"). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange Energy; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated future production; costs of production; success of exploration activities; and currency exchange rate fluctuations. Except for statements of historical fact relating to the company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange Energy and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated. Although Alange Energy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange Energy undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.
Alange Energy Announces Closing of C$70,035,000 Equity Financing
TORONTO, Feb. 22 /CNW/ - Alange Energy Corp (TSXV: ALE) ("Alange Energy" or the "Company") is pleased to announce that it has closed its previously announced equity financing (the "Offering") of 233,450,000 units of the Company (the "Units") (which includes the exercise in full of the over-allotment option of 30,450,000 Units) at a price of C$0.30 per Unit for aggregated proceeds of C$70,035,000. The Units were sold pursuant to an underwriting agreement with a syndicate of underwriters led by GMP Securities L.P., and including Canaccord Genuity Corp., Jennings Capital Inc. and Raymond James Ltd. (collectively, the "Underwriters").
Each Unit consists of one common share in the capital of the Company and one-half of one common share purchase warrant of the Company. Each full warrant entitles the holder to purchase an additional common share in the capital of the Company at an exercise price of C$0.50 for a term of 5 years from the date hereof. In addition, the Company has issued Units equal to 6% of the Units sold pursuant to the Offering to the Underwriters in settlement of their underwriting commission.
The net proceeds raised under the Offering will be used to repay approximately US$33 million of bank debt, with the balance being used to, among other things, provide funding for exploration and development of the Company's core assets in 2011 as well as for general corporate and working capital purposes.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This news release is not an offer of securities for sale into the United States or Canada. No offering of securities shall be made in the United States or to or on behalf of a US person except pursuant to registration under the US Securities Act of 1933, as amended, or an exemption therefrom.
In a few days it looks like financing will be done and ALE will be debt free company going forward. Good price to get in @ 0.29-0.30 should spike with this king of news to 0.50. GL
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Alange Energy Announces Approximately C$10 Million Increase in Bought Deal Equity Financing
1/19/2011 7:15:59 PM - NFD
TORONTO, ONTARIO, Jan 19, 2011 (Marketwire via COMTEX News Network) --
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Alange Energy Corp (TSX VENTURE:ALE) ("Alange Energy" or the "Company") is pleased to announce that due to strong investor demand for its recently announced bought deal financing of Units (the "Offering"), the Company and the Underwriters have agreed to increase the size of the Offering by C$10 million.
The Offering which is being conducted by a syndicate of underwriters led by GMP Securities L.P., and including Canaccord Genuity Corp., Jennings Capital Inc. and Raymond James Ltd. (collectively, the "Underwriters"), will now include the issuance of an additional 36,000,000 Units at a price of C$0.30 per Unit, for a total of 203,000,000 Units being issued for aggregate gross proceeds of C$60,900,000. In connection with the Offering, the Company has granted the Underwriters an option, exercisable for a period of up to 30 days following the closing of the Offering, to purchase 30,450,000 additional Units to cover over-allotments, if any, and for market stabilization purposes.
Each Unit will consist of one common share of the Company and one-half of one common share purchase warrant of the Company. Each full warrant will entitle the holder to purchase an additional common share of the Company at an exercise price of C$0.50 for a term of 5 years from the closing date of the Offering. In addition, the Company will issue Units equal to 6% of the Units sold pursuant to the Offering to the Underwriters in settlement of their underwriting commission.
The additional proceeds raised under the Offering will be used for the further retirement of a portion of the Company's debt outstanding. The Offering is expected to close on or about February 10, 2011 and is subject to the Company receiving all necessary regulatory approvals.
This news release is not an offer of securities for sale in the United States. The securities described in this press release have not and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933 or an applicable exemption from the registration requirements thereof.
About Alange Energy Corp.
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.
All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange Energy; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated production; costs of production; success of exploration activities; currency exchange rate fluctuations; the use of proceeds of the proposed financing; the anticipated results of the implementation of the Company's strategic plans and operational decisions, including its decisions to focus on certain core properties, transfer operatorship of Topoyaco to Pacific Rubiales Energy Corp., decrease G&A and dispose or farm-out certain non-core assets; Alange Energy's debt levels and expectations to meet its debt service levels; the amount of royalties; the effect of cost saving measures on the Company's cash flow; expectations regarding sufficiency of operating cash flows; and the timing for reporting results of the review of the Company's internal controls and procedures, management systems and corporate governance practices.
Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange Energy and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes, other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated; the ability of Alange Energy to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of drilling, completion, pipeline, storage and facility construction and expansion; the regulatory framework regarding royalties, taxes and environmental matters; the ability of Alange Energy to successfully market its oil and natural gas products and completion of the review of internal controls and procedures, management systems and corporate governance practices. Although Alange Energy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange Energy undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Information in this press release expressed in boe is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.
SOURCE: Alange Energy Corp.
Alange Energy Corp. Peter Volk General Counsel & Secretary 416-360-4653 pvolk@alangecorp.com Alange Energy Corp. Ms. Belinda Labatte Investor Relations 647-428-7035 belinda@thecapitallab.com
Copyright (C) 2011 Marketwire. All rights reserved.
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Alange Energy Provides Update on Internal Review Process Including Recapitalization and Restructuring of the Company and Announces a C$50 Million Bought Deal Equity Financing
1/19/2011 3:24:26 PM - NFD
TORONTO, ONTARIO, Jan 19, 2011 (Marketwire via COMTEX News Network) --
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Alange Energy Corp (TSX VENTURE:ALE) ("Alange Energy" or the "Company") today announced a number of actions being taken as a result of the previously announced internal review process that was initiated with the sole objective of re-establishing investor confidence in the Company's operations, disclosure and future prospects. In addition, the review process included a full analysis of the strategic opportunities available, including development of the Company's portfolio of core assets, joint ventures and the sale of non-core assets.
The actions announced today by the Company as a result of the internal review process include:
-- Commencement of management restructuring;-- Recapitalization of the balance sheet with a C$50.1 million bought deal prospectus offering of units to repay approximately US$22 million of bank debt and to provide funding for exploration and development of the Company's core assets in 2011;-- Focus on Alange Energy's core oil assets: Cubiro, La Punta, Topoyaco, Santa Cruz;-- Transfer of control of operatorship of Topoyaco to Pacific Rubiales Energy Corp. to leverage Pacific Rubiales' technical expertise in Colombia and its financial capacity to operate the joint venture;-- Immediate 40% decrease in ongoing G&A through a staff reduction of 8 senior managers and 19 technical consultants in Colombia; and-- Dispose or farm out of non-core assets: gas assets and Las Quinchas heavy oil interest.
The Company announced today that Mr. Luis Giusti Sr. has stepped down as Chief Executive Officer and will remain on the board to provide his support to this process. The board will also ensure it has the resources available to oversee the execution of the strategic plan that is being implemented under new leadership and a new management team. To this effect, the Executive Committee of the board of directors (consisting of the independent members of the board) has authorized the delegation of authority to Mr. Gregg Vernon, Interim Chief Operating Officer, while it conducts a search for a new Chief Executive Officer. In addition, the Executive Committee has hired two experienced oil and gas industry consultants to support the implementation of the strategic plan initiatives. Mr. Luciano Biondi Golinucci, a graduate of the Universidad del Zulia with a B.Sc. in petroleum engineering with 42 years of extensive experience in all facets of the business, in particular the production and drilling operations in all manner of fields, will focus on improvements to increase production from the Company's core assets. The Executive Committee has also retained the services of Mr. Francisco Bustillos, an executive with over 30 years of financial and management experience in the oil industry. Working closely with Michael Davies, the Company's Chief Financial Officer, Mr. Bustillos will lead the implementation of improved internal controls, processes and management systems in Alange Energy's Colombian operations.
During 2010, previous management made use of debt facilities and accounts payable factoring to fund its exploration and development program. The Company's debt position (current and long-term) currently stands at approximately US$47 million and the Company will require approximately US$27 million in the coming year to meet its debt service obligations. Although cash flow generated from the Company's share of the current production of approximately 2,400 barrels oil equivalent per day ("boed"), before deduction of royalties, is expected to be able to fund these debt service obligations and ongoing general and administrative expenses ("G&A"), any remaining internally generated cash flows will not be sufficient to fund all of the Company's exploration commitments and capital programs essential to realize the potential of Alange Energy's core assets. The internal review process has identified a number of areas that must be addressed to put the Company on a solid financial foundation to create shareholder value.
The Company announced today that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. (the "Underwriters") whereby the Underwriters have agreed to acquire on a bought deal basis 167,000,000 units (the "Units") at a price of C$0.30 per Unit for cash proceeds of C$50,100,000. Each Unit will consist of one common share and one-half of one common share purchase warrant of the Company. Each full warrant will entitle the holder to purchase an additional common share of the Company at an exercise price of C$0.50 for a term of 5 years from the closing date of the offering. In addition, the Company will issue Units equal to 6% of the Units sold pursuant to the offering to the Underwriters in settlement of their underwriting commission. In connection with the bought deal financing, the Company has granted the Underwriters an option, exercisable for a period of up to 30 days following the closing of the offering, to purchase additional Units equal to 15% of the number of Units sold pursuant to the offering to cover over-allotments, if any, and for market stabilization purposes. The offering is expected to close on or about February 10, 2011 and is subject to the Company receiving all necessary regulatory approvals.
The estimated amount of sources and uses of the proceeds from the offering are as follows:
Source of funds: Net proceeds of the offering US$50.1 million (1)---------------------------------------------------------------------Uses of funds: Transaction costs Agent commission Nil (2) Other estimated costs US$0.5 million Repayment of debt 14% term loans due April 2012 (3) US$3.9 million Term loans due May to December 2013 (3) US$18.1 million 2011 exploration commitments Topoyaco US$6.0 million Santa Cruz US$12.5 million La Punta US$6.0 million Available to fund working capital requirements US$3.1 million---------------------------------------------------------------------Total uses of funds US$50.1 million---------------------------------------------------------------------Notes:(1) US funds calculated based on the closing exchange rate on January 18, 2011 of US$1.00 = C$1.00.(2) The agent will receive 6% of the number of units issued pursuant to the offering in lieu of a cash commission.(3) Represents the outstanding principal amount and accrued interest (and penalties, if any) under the loan facility agreements.
Repayment of the term loans with a portion of the proceeds of the offering will give the Company immediate access to approximately US$1.0 million per month of its internally generated cash flow from operations to reinvest in the development of its core assets.
The Company has also completed a thorough review of its corporate and operational infrastructure to identify and implement meaningful cost savings measures to increase operating cash flow. Through the first nine months of 2010, general and administrative expenses ("G&A") amounted to US$13.5 million. This included US$2.8 million of costs related to an acquisition transaction that was not completed, financing fees related to the debt financing and other non-recurring items. Excluding these items, ongoing G&A averaged approximately US$1.2 million per month or US$16 per barrel produced, well in excess of industry comparables. As part of this review, management has already taken action to reduce ongoing G&A by 40%, effective immediately, through a staff reduction of eight senior managers and 19 technical consultants in Colombia. While additional costs savings measures are being considered, the actions taken to-date will immediately increase operating cash flow by approximately US$0.5 million per month.
Through the analysis completed as part of the internal review process, the Company made a distinction between core and non-core assets in its portfolio. Presently, approximately 90% of Alange Energy's production is sourced from its oil interests in the Llanos Basin, specifically Cubiro and La Punta. These producing properties currently generate almost 100% of the Company's cash flow from its operations and will continue to be among its core assets. The Company will leverage the significant development activity undertaken at Cubiro in 2010 and the successful completion of the La Punta 3 well in June 2010 to generate sustainable operating cash flows in 2011. Continued exploration work in Blocks B and C of Cubiro together with the Company's commitment to two exploration wells at La Punta will provide a foundation for production growth in 2011 in the Llanos Basin.
In 2010, the Company commenced its exploration program at another of its core assets, the Topoyaco property, a large block of more than 60,000 hectares, which has shown several potential prospects in the foothills of the Andes Mountain chain. Alange Energy holds a 50% working interest in Topoyaco and currently controls the operatorship, partnering with Pacific Rubiales, which holds the remaining 50% working interest. In December 2010, Alange Energy announced that it had confirmed a heavy oil discovery in the Topoyaco-2 exploration well in Prospect C and that the Company was initiating testing with an electro-submersible pump in the Topoyaco-1 exploration well in Prospect B. In 2011, exploration activities will continue with the drilling of a new well in Prospect D, the most important objective of the block. Given the importance of the next phase of the Topoyaco exploration program, the Company has agreed to transfer control of the operatorship of the block to Pacific Rubiales to leverage Pacific Rubiales' extensive technical capabilities in Colombia and its financial capacity to operate the joint venture.
The strategic plan also affirms the Company's commitment to its 100%-owned Santa Cruz property following the acquisition of 60 km(2)of 3D seismic in the fourth quarter of 2010. In 2011, the Company will drill an exploratory well, at an estimated capital cost of US$12.5 million, to meet its Phase 3 commitment with Colombia's National Hydrocarbons Agency ("ANH") due by May 2011.
In June and July 2010, the Company had announced it had successfully been awarded a total of five new blocks during the 2010 Open Round conducted by the ANH. Through the internal review process, it became evident that the Company is still in the process of finalizing the block awards with the ANH, for which it will be the operator. In 2010, the Company entered into an agreement with a third party to fund 100% of the phase 1 exploration commitments to earn a 90% interest in the blocks. At the end of phase 1, the Company has an option to increase its participation to 20%.
The Company has identified several non-core assets in its portfolio, including the Las Quinchas heavy oil property and certain gas assets. Transactions are already underway to dispose of certain non-core assets. The Company will continue to seek other opportunities in the near term to dispose or farm out the remainder of its non-core assets. These transactions are expected to provide additional funds to reinvest in the Company's core assets and to reduce accounts payable related to its 2010 exploration and development campaign. Announcements will be made once transactions are formalized.
With the internal review process still ongoing, the Company is not providing guidance at this time on production growth or capital spending. A full report will be provided on conclusion of the internal review process, expected to be completed in the next four to six weeks.
This news release is not an offer of securities for sale in the United States. The securities described in this press release have not and will not be registered under the U.S. Securities Act of 1933, and may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933 or an applicable exemption from the registration requirements thereof.
About Alange Energy Corp.
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.
All monetary amounts in U.S. dollars unless otherwise stated. This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian securities laws concerning the business, operations and financial performance and condition of Alange Energy. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and reserve life of the various oil and gas projects of Alange Energy; the estimation of oil and gas reserves; the realization of oil and gas reserve estimates; the timing and amount of estimated production; costs of production; success of exploration activities; currency exchange rate fluctuations; the use of proceeds of the proposed financing; the anticipated results of the implementation of the Company's strategic plans and operational decisions, including its decisions to focus on certain core properties, transfer operatorship of Topoyaco to Pacific Rubiales Energy Corp., decrease G&A and dispose or farm-out certain non-core assets; Alange Energy's debt levels and expectations to meet its debt service levels; the amount of royalties; the effect of cost saving measures on the Company's cash flow; expectations regarding sufficiency of operating cash flows; and the timing for reporting results of the review of the Company's internal controls and procedures, management systems and corporate governance practices.
Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Alange Energy and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, risks relating to international operations, fluctuating oil and gas prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes, other risks of the oil and gas industry, failure of plant, equipment or processes to operate as anticipated; the ability of Alange Energy to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of drilling, completion, pipeline, storage and facility construction and expansion; the regulatory framework regarding royalties, taxes and environmental matters; the ability of Alange Energy to successfully market its oil and natural gas products. and completion of the review of internal controls and procedures, management systems and corporate governance practices. Although Alange Energy has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Alange Energy undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Statements concerning oil and gas reserve estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the oil and gas that will be encountered if the property is developed. Information in this press release expressed in boe is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Estimated values of future net revenue disclosed do not represent fair market value.
SOURCE: Alange Energy Corp.
Alange Energy Corp. Peter Volk General Counsel & Secretary 416-360-4653 pvolk@alangecorp.com Alange Energy Corp. Ms. Belinda Labatte Investor Relations 647-428-7035 belinda@thecapitallab.com
Copyright (C) 2011 Marketwire. All rights reserved.
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Alange Energy is a Canadian-based oil and gas exploration and production company with working interests in 12 properties in Colombia and over 1.2 million acres of property. The Company is focused on increasing and optimizing production from its producing assets, while undertaking a comprehensive exploration program on its entire portfolio to identify targets and increase reserves. The Company's share of production is currently approximately 2,400 barrels of oil equivalent per day ("boe/d") before deduction of royalties.
ALANGE ENERGY CONFIRMS FINANCING IS IN PLACE FOR BALANCE OF 2010 CAPITAL PLAN
Sep. 1, 2010 (Canada NewsWire Group) --
TORONTO, Sept. 1 /CNW/ - Alange Energy Corp. (TSXV: ALE) confirmed today that it has secured the debt financing required to fund its investment program for the balance of 2010. This plan includes the execution of its exploration, appraisal and development program over the last six months of 2010 comprising 12 new wells and 4 workovers and the completion of three infrastructure projects at its Carbonera gas operations. As of today, the Company requires $35 million of funding to complete this capital program. In addition, the Company has a separate exploration budget of up to $5 million to gather seismic data at Arrendajo and Carbonera and $4 million of payments related to its option to acquire additional working interests in Catguas. To fund the $44 million of expenditures required over the balance of 2010, the Company has secured approximately $32 million in additional term loan facilities. With a current cash balance of approximately $3 million, the remaining balance of capital funding required, in addition to general and administrative expenses and debt service, will be sourced from internally generated cash flow from operations. The expected average production of 4,700 barrels oil equivalent per day ("boed") during the last four months of the year (exit rate of 8,000 boed) will generate more than enough operating cash flow to cover these requirements.
Luis E. Giusti, the Company's Chief Executive Officer, stated, "we have an ambitious capital investment program to be conducted over the balance of 2010 that is crucial for continuing our ramp up of production. As a result of a number of inquiries following yesterday's conference call, we feel it is important to clarify that we have secured the necessary external debt financing required to carry out these initiatives and as such, have no need for equity financing to fund our organic growth. The Colombian and international financial institutions have been very supportive of our Company as demonstrated tangibly through the debt facilities we have successfully put into place in recent months."
As of today, the Company has closed the following new credit facilities, each of which is secured with cash flows from oil sales from the Cubiro property in an amount required to meet the monthly debt repayment obligations, subject to a limit not to commit more than 30% of crude oil production to service the debt repayments:
<<
- a three-year term loan pursuant to a May 25, 2010 commitment letter
from a local Colombian bank in the amount of Colombian peso ("COP")
27.4 billion (equivalent to $15.0 million) repayable in 36 equal
monthly installments of principal and interest. The loan bears
interest at the local Colombian market weekly average rate of
fixed-term deposits ("DTF") plus 6.5%. DTF as of yesterday was 3.48%.
- a one-year term loan with a local Colombian bank in the amount of COP
12.0 billion (equivalent to $6.6 million) with interest only monthly
payments and the principal due upon maturity of the facility. The
loan bears interest at DTF plus 3.32%.
- a $3.5 million second disbursement pursuant to a term loan agreement
entered into with LW Securities in April 2010. Repayable over a
two-year period in equal monthly installments of principal and
interest, the loan bears interest at 14% per annum.
>>
In addition, the Company has arranged a new three-year term loan with a local Colombian financial entity, also secured with cash flows from Cubiro, in the amount of COP 12.5 billion (equivalent to $6.8 million) repayable in 36 equal monthly installments of principal and interest. The loan bears interest at fixed rate of 12.68% per annum. The Company will draw down the proceeds from this loan facility next week.
The Company has also increased its revolving credit facilities to provide up to an additional $7.5 million to fund short-term working capital requirements.
In addition to these external sources of debt financing, the Company expects to improve its operating cash flow by implementing a new commercial strategy commencing October 1, 2010 for oil sales from its Cubiro property. This new program, which is based on long haul, high volume ground transportation and direct international sales, will see a significant reduction in the time taken to collect the proceeds from oil sales from the current approximately 65 days down to 15 days.
Alange Energy is a Canadian-based oil and gas exploration and production company, with working interests in 12 properties in four basins in Colombia. Further information can be obtained by visiting our website at www.alangeenergy.com.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the company believes, expects or anticipates will or may occur in the future (including, without limitation, statements regarding estimates and/or assumptions in respect of production, revenue, cash flow and costs, reserve and resource estimates, potential resources and reserves and the company's exploration and development plans and objectives) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the company based on information currently available to the company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; the possibility that actual circumstances will differ from the estimates and assumptions; failure to establish estimated resources or reserves; fluctuations in petroleum prices and currency exchange rates; inflation; changes in equity markets; political developments in Colombia; changes to regulations affecting the company's activities; uncertainties relating to the availability and costs of financing needed in the future; the uncertainties involved in interpreting drilling results and other geological data; and the other risks disclosed under the heading "Risk Factors" and elsewhere in the company's periodic reports filed on SEDAR at www.sedar.com. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.
Information in this press release expressed in barrels of oil equivalent (boe) is derived by converting natural gas to oil in the ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Neither 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 news release.
%SEDAR: 00005776E
Michael Davies, Chief Financial Officer, 416-360-4653, ext. 224
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