Delphi Energy Corp. DPGYF

RE:news

[not4anymore]

CALGARY, ALBERTA – June 4, 2015 – Delphi Energy Corp. (“Delphi” or the “Company”) is pleased to announce it has entered into a purchase and sale agreement to sell its working interests in producing properties, facilities and infrastructure and undeveloped land in the greater Wapiti area for $50.0 million, subject to normal course closing adjustments. Disposition Details of the divested assets are as follows:  Production for the month of April of approximately 1,230 barrels of oil equivalent per day (“boe/d”) consisting of approximately 4.9 million cubic feet per day of natural gas and 420 boe/d of natural gas liquids (49 percent ethane).  Total land in the greater Wapiti area of 31,277 net acres inclusive of 19,377 net acres of undeveloped land. The transaction will have an effective date of April 1, 2015 and is expected to close by the end of June, 2015. The net proceeds from the disposition will be applied to reduce the Company’s bank indebtedness. The Company has received a $5.0 million, non-refundable deposit to be applied against the purchase price at closing. Outlook Delphi remains focused on its large-scale Montney project at Bigstone where it holds 138.5 gross sections of land. The Wapiti disposition will provide increased financial flexibility, reducing bank debt by almost 30 percent with a much lower percentage impact to the Company’s cash generating capability. The Company’s forecasted ratio of net debt to fourth quarter 2015 cash flow is expected to decrease almost 25 percent to 2.6 – 2.8 from 3.3 – 3.5 as a result of the transaction. Given the uncertainties of the current environment, at this time the Company is not forecasting any changes to capital spending plans through the remainder of the year. Capital spending is expected to be within the context of cash flow generated. One Montney well at Bigstone, drilled in the first quarter is scheduled to be completed in early July with drilling operations scheduled to start later this month after an extended spring break up. Delphi Energy is a Calgary-based company that explores, develops and produces oil and natural gas in Western Canada. The Company is managed by a proven technical team. Delphi trades on the Toronto Stock Exchange under the symbol DEE.