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Paramount Resources Ltd. ("Paramount" or the "Company") (TSX:POU) and Cavalier Energy ("Cavalier"), Paramount's wholly-owned subsidiary, jointly announced today that Cavalier has closed a transaction pursuant to which it has granted a royalty (the "Cavalier Royalty") to an unrelated third party on its oil sands properties (the "Royalty Lands") for cash consideration of $100 million.
The Cavalier Royalty will be calculated on a sliding scale based on the prevailing monthly Western Canadian Select ("WCS") price. Production will not be subject to any royalty when the WCS price is below US$50 per barrel. At a WCS price of US$50 per barrel, the rate will be 2% and the rate will increase linearly to a maximum of 20% at a WCS price of US$140 per barrel. The Cavalier Royalty will be payable based on Cavalier's realized bitumen price, net of diluent, transportation and storage costs. The Cavalier Royalty is secured by a lien over the Royalty Lands. https://www.newswire.ca/news-releases/paramount-resources-ltd-announces-the-closing-of-a-grant-by-cavalier-energy-of-a-royalty-for-100-million-the-sale-of-50-million-seven-generations-shares-for-150-million-and-a-dividend-of-its-remaining-38-million-607070076.html
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