CALGARY, Alberta, Feb. 08, 2018 (GLOBE NEWSWIRE) -- (TSX:EGL): Eagle Energy Inc. (“Eagle”) is pleased to announce that it has sold its oil and gas interests in the Salt Flat field (the “Salt Flat Field”) located in Caldwell County, Texas for approximately $CA 33.3 million cash, subject to customary post-closing adjustments. The transaction is being simultaneously announced and closed with a private, unaffiliated U.S. company.
Eagle will use the net proceeds from the sale of the Salt Flat Field to reduce outstanding debt under the secured term loan and to further fund its drilling program in North Texas. As at December 31, 2017, Eagle remains in compliance with all covenants under its loan agreement.
Mr. Wayne Wisniewski, Eagle’s President and Chief Executive Officer, said, “This is a rare opportunity to capture nearly all our proved plus probable reserves value booked to this field at strip pricing. And the sales price is approximately 45% higher than what would have been realized only six months ago.”
Eagle’s management and the board of directors (the “Board”) arrived at this decision after carefully considering the expert advice of Detring Energy Advisors, a Houston-based advisory firm retained by Eagle who specializes in acquisitions and divestitures of United States upstream oil and gas properties. The transaction is at a premium to the lending value attributed to this field under Eagle’s secured term loan. Eagle’s management and Board believe that the capital required to continue to develop the Salt Flat Field would provide less attractive returns when compared to alternative uses of company funds and that the transaction is in the best interests of Eagle at this time. After giving effect to this transaction, Eagle estimates its corporate decline rate on reserves will improve to 14%.