Some news CALGARY, ALBERTA--(Marketwired - Dec 1, 2016) - BlackPearl Resources Inc.("BlackPearl" or the "Company") (PXX.TO)(OMX:PXXS) is pleased to announce it has completed the sale of a minor gross overriding royalty interest on its Onion Lake property for $55 million.
Under the terms of the agreement BlackPearl sold an approximate 1.75% royalty on production from substantially all of its Onion Lake lands. BlackPearl currently has conventional and thermal production of approximately 8,000 barrels of oil per day at Onion Lake and is planning a 6,000 barrel per day second phase expansion of its thermal operations in the area.
The proceeds of the sale will initially be used to re-pay bank indebtedness, which will free up borrowing capacity on our credit facilities that is expected to be used to partially fund the expansion of our thermal operations at Onion Lake in addition to continued development of our other core projects. The Onion Lake phase two expansion is estimated to cost approximately $180 million.
Additionally, the Company's banking syndicate recently completed its semi-annual review of our credit facilities and has agreed to maintain the amount available under these facilities at $117.5 million. With the completion of the royalty sale our net debt at the end of the year is expected to be nil.