Argosy Energy Inc. announced this morning that it will sell its interests in certain lands that include the Montney formation in the Ante Creek area of Alberta and that the company is initiating a strategic alternatives process.
The Ante Creek assets will net total consideration of approximately $5 million, after closing adjustments. Argosy said proceeds from the sale are intended to be used to reduce corporate indebtedness and provide the company flexibility with respect to its operations in the southern Alberta Bakken play.
“The sale of the Ante Creek assets are not expected to have a material impact to corporate production and cash flow,” the company said in a press release.
In addition, Argosy’s board of directors has decided to initiate a process to “identify, examine and consider a range of strategic alternatives” available to the company with the objective of enhancing shareholder value. As such, the company said it has established a special committee consisting of Jacob Roorda, acting as chair, Brian Mellum and Peter Salamon and has engaged GMP Securities L.P. and Haywood Securities Inc. to act as co-financial advisors in connection with this process.
Agrosy noted that the strategic alternatives process may include a number of strategic alternatives, such as: a sale of the shares of the company either in one or a series of transactions or in the form of a financing, a merger, recapitalization, arrangement, amalgamation, a sale of a material portion of the company’s assets, signing of a joint-venture agreement, or consideration of other alternatives as the special committee may determine.
The company cautions that there are no guarantees that the strategic alternatives process will result in a transaction or, if a transaction is undertaken, as to its term or timing. Argosy has not set a definitive schedule to complete its evaluation and does not intend to disclose developments with respect to this strategic alternatives process unless and until the evaluation has been completed and a definitive agreement has been reached.
The company’s primary asset is a 100 per cent working interest in a 34-section land position within a well-developed portion of the Alberta Basin Bakken prospect trend. Argosy has identified up to 100 low-risk development drilling locations that are well defined on a comprehensive, proprietary 3D seismic base.