Fairborne closes Marlboro, Clive sale for $188-million
2012-10-01 16:36 ET - News Release
Mr. Steven VanSickle reports
FAIRBORNE ANNOUNCES CLOSING OF STRATEGIC ASSET DISPOSITIONS
Fairborne Energy Ltd. has closed its previously announced sale of properties in the company's greater Marlboro area (Marlboro, McLeod and Westerose) and the company's shallow gas/coal bed methane assets in the Clive area for net proceeds, before transaction costs, of $188-million. Proceeds from the divestiture were used to reduce bank indebtedness.
The company's postclosing bank facility will be $80-million. At the time of closing, there are no funds drawn on the facility with only a nominal working capital deficit related to transaction costs.
Going forward, Fairborne will focus on the delineation and exploitation of its large land base in the greater Harlech area, where the company has 312 gross (201 net) sections of land in the heart of the liquids-rich Deep basin fairway. With postclosing current production of approximately 4,500 barrels of oil equivalent per day, proved reserves of 15.3 million barrels of oil equivalent and proved plus probable reserves of 23.0 million boe, combined with a recently announced resource study of 131 million boe of economic contingent resource (best estimate) attributable to the company's working interest share in the Cardium and no drawings on its bank facility, the company will have the cash flow, balance sheet flexibility and inventory of opportunities to deliver significant economic growth for the future.
The closing of these two asset sales marks the formal culmination of Fairborne's previously announced review process.