CALGARY, Alberta, Aug. 4, 2015 (GLOBE NEWSWIRE) -- Quattro Exploration and Production Ltd. (TSX-V:QXP) ("Quattro" or the "Company") is pleased to report that effective August 4, 2015 the Company's Tier classification will change from Tier 2 to Tier 1.
In addition to the graduation to becoming a Tier 1 Company on the TSX Venture Exchange, pursuant to the previously announced acquisition on June 18th, 2015, the Company (the "purchaser") issued 15,000 Series 3, Class C Preferred Shares at a deemed price of $100 per share to an Alberta base private oil and gas company (the "vendor") for the purchase of oil and gas production, facilities and lands, currently producing from the Lower Halfway and having 29 prospective locations in the Montney, Doig and Lower Halfway formations located in northeast British Columbia. The Class C shares will bear a preferred dividend of 3.5% per annum and are convertible into 40 Class A common shares for each Class C share at any time after the second year with the Company retaining the right to redeem the shares any time after the fifth year from the date of issuance.
In addition to the issuance of the Class C Preferred shares Quattro continues to pursue a number of proposals received for the issuance of additional Class C shares and Term Debt, both actions being consistent with the Company's intention of further strengthening its balance sheet and improving liquidity, while maintaining a Debt to Equity ratio of less than 1.5 to 1.
"Quattro sees a combination of the prudent use of non-high yield term debt in 2015 through 2016 and the measured issuance of dividend yielding Class C shares as the appropriate measure for moving forward during this continued downturn in the energy commodity price cycle," said Leonard Van Betuw, President and CEO. "Quattro's conservative approach has always been to maintain predictable cash-flow, to firstly align the Company with its current activities and stakeholders, while continually building Quattro's foundation for long term growth."
Quattro is currently advancing additional financing activities, the anticipation being that they will be concluded in the 3rd quarter of 2015, with a plan to increase our long term debt by approximately $4 million at favorable terms, to a targeted level of $10 million or approximately 1X forward cash-flow in the 3rd quarter of 2015. These efforts are anticipated to further improve liquidity and working capital to the degree necessary during this time of industry contraction and will position Quattro to achieve its projected exit targets for growth in 2015. The Company is currently planning to accomplish its 2015 goals from its current inventory of remediation, well workovers and re-completions associated with the acquisitions closed to date in 2015. Quattro's low-risk, high return strategy to consolidate and grow, year over year, production and cash-flow, is also anticipated to continue to position the Company potentially for further accretive opportunities for consolidation and growth in 2015 and 2016.
The Company's financials for the 2nd quarter ending June 30, 2015 are scheduled for release the week of August 24, 2015 and are anticipated to emphasize the Company's strategy of being a low cost producer and measurable long term strategy for growth through high impact exploration and low cost production.