Jan 22, 2015 - management circular
MGT/Board have been grumbling about the market since 2012 recognizing their "value", yet never buy shares in the open market????? ...............................................Background to the Arrangement In February 2012, in response to the lack of market recognition of the inherent value of Anderson's Cardium oil production base, prospective Cardium horizontal light oil drilling inventory and significant tax pools, the Board of Directors initiated a process to identify, examine and consider a range of strategic alternatives available to Anderson. Over the next year and a half, a special committee of the Board of Directors investigated various options to enhance shareholder value, including the potential sale of Anderson. The process concluded in October 2013. During the process, Anderson sold over $150 million in assets, reduced its bank debt to nil, reduced its decommissioning obligations by approximately half and restructured or completed, as applicable, all of its shallow gas and Cardium drilling commitments. It also demonstrated the improved production performance of slick water fracture stimulation and continued to be the industry leader in low capital costs in the Cardium horizontal light oil play. Anderson forged a new single bank relationship with ATB, which had been part of its previous syndicate of three lenders. Coming out of the strategic alternatives process, Anderson was substantially smaller in terms of production. Although Anderson had no bank debt, the Anderson Series A Debentures and the Anderson Series B Debentures mature in 2016 and 2017, respectively. Anderson's business plan has been to pursue growth of its asset base and cash flow in order to increase its financial flexibility to meet its obligations when they became due. This business plan includes rebuilding its asset base by drilling Cardium horizontal light oil wells and growing its Cardium horizontal oil drilling inventory in the Willesden Green, West Pembina and Buck Lake areas. It also includes exploring opportunities to optimize, rationalize, consolidate and improve the profitability of its shallow gas assets