Elkwater Resources Ltd.
TSX VENTURE : ELW

October 15, 2014 08:14 ET

Elkwater Resources Ltd. Announces Strategic, Light Oil Focused Acquisitions and $100 Million Equity Financing

CALGARY, ALBERTA--(Marketwired - Oct. 15, 2014) -

NOT FOR DISSEMINATION IN THE UNITED STATES. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW.

Elkwater Resources Ltd. (TSX VENTURE:ELW) ("Elkwater" or the "Company") (to be renamed "Striker Exploration Corp.") is pleased to announce that it has entered into the following strategic transactions:

  1. an arrangement agreement (the "Arrangement Agreement") with Exoro Energy Inc. ("Exoro"), an arm's length private oil and gas company with assets concentrated in West Central Alberta, including Pembina, Chigwell and Ferrier/Willesden Green (the "Exoro Assets"), that provides for the acquisition by Elkwater of all of the issued and outstanding shares of Exoro (the "Exoro Acquisition"); and

  2. an asset purchase and sale agreement with an arm's length oil and gas producer that provides for the acquisition by Elkwater of medium gravity oil producing assets concentrated in the Killam area (the "Killam Assets") of East Central Alberta (the "Killam Asset Acquisition").

Upon closing of the Exoro Acquisition and the Killam Asset Acquisition (collectively, the "Acquisitions"), Elkwater will have a concentrated asset base of high netback, low decline crude oil and natural gas assets, which, along with its strong financial position and significant financial flexibility, will position Elkwater to continue to execute on its strategy of high growth through development and exploitation drilling and further consolidation opportunities.

The Exoro Acquisition will be effected by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (Alberta). The Exoro Acquisition adds an aggregate of 1,950 boe/d (60% oil and NGLs) of operated production. The Exoro Assets include 132,281 gross (83,118 net) acres of land at an average working interest of approximately 63% situated in an area with extensive infrastructure and multiple sales points. Under the terms of the Arrangement Agreement, shareholders of Exoro ("Exoro Shareholders") will receive, at their election, for each share of Exoro held, either: (i) 3.47 common shares of the Company ("Elkwater Shares") (at a deemed price of $0.375 per Elkwater Share) and 1.735 Elkwater Share purchase warrants ("Warrants"); (ii) $1.30 in cash; or (iii) a combination thereof. Each Warrant shall entitle the holder thereof to purchase one Elkwater Share (a "Warrant Share") at a price of $0.50 per Warrant Share for a period of 18 months following the closing date of the Exoro Acquisition (the "Exoro Closing Date"). The Warrants shall provide that, if during the 18 month period following the Exoro Closing Date, the Company's volume weighted average share price for 20 consecutive trading days on the TSX Venture Exchange (the "TSXV") (or other applicable exchange) equals or exceeds $0.65 per Elkwater Share, the Company may give notice to the holders of the Warrants that the Warrants will expire 30 days from the date of receipt of the notice, during which 30 day period the holders may exercise their Warrants in accordance with their terms. Elkwater will also assume Exoro's net debt, estimated to be $22.8 million, after accounting for severance and proceeds from the exercise of options associated with the Exoro Acquisition. The total transaction value in respect of the Exoro Acquisition is approximately $83.3 million, including the assumption of net debt. The Exoro Closing Date is expected to be on or about November 20, 2014. Completion of the Exoro Acquisition is subject to customary conditions and receipt of all regulatory approvals, including the approval of the Exoro Shareholders and the TSXV.

The Killam Assets add an aggregate of 525 boe/d (60% oil and NGLs) of operated production in the Killam area of Alberta. The Killam Assets include 5,760 gross (5,440 net) acres of land at an average working interest of 94% and access to wholly-owned infrastructure. The total cash consideration for the Killam Assets is $30.5 million, subject to normal adjustments based on an October 1, 2014, effective date.

The Killam Asset Acquisition is expected to be completed on or about November 20, 2014. Completion of the Killam Asset Acquisition is subject to customary conditions and receipt of all regulatory approvals, including the approval of the TSXV.

Concurrent with the Acquisitions, Elkwater is pleased to announce a $100 million bought deal equity financing (the "Financing") with a syndicate of underwriters, which is further described below. The Financing is subject to customary conditions, including receipt of all regulatory and TSXV approvals, and is expected to close on or about October 29, 2014.

TD Securities Inc. will act as lead arranger and sole bookrunner on a new credit facility of a minimum of $55 million in support of the Acquisitions and for general corporate purposes.

Strategic Rationale for the Acquisitions and Key Attributes

The Acquisitions further advance Elkwater's stated business plan to focus predominantly on oil opportunities in Western Canada, promoting efficient growth through a targeted consolidation strategy complemented by development and exploitation drilling.

Upon completion of the Acquisitions, Elkwater will have an asset base with operating areas producing high netback crude oil and natural gas from a low decline production base and drilling inventory supporting Elkwater's high growth objectives.

The key benefits to Elkwater shareholders pro forma the Acquisitions and the Financing are as follows:

  • Provides Elkwater with a foundation to provide for high growth through development and exploration activities, while continuing to source additional acquisition and farm-in opportunities;
  • Adds an asset base focused in Killam, providing Elkwater an attractive platform for growth, both organically and through consolidating targeted acquisitions;
  • Adds approximately 2,475 boe/d(1) (60% oil and NGLs(1)) of production with a base decline rate of approximately 28%(2) and attractive operating netbacks(7) of approximately $40.00 per boe(3);
  • High working interest properties combined with company-owned infrastructure which ideally positions Elkwater to execute on its future growth plans;
  • 11,254 MBOE of Proved plus Probable reserves, generating a reserve life index of approximately 12.5 years based on current production(2);
  • Operational diversity and an extensive inventory of 65 (58.6 net)(4) drilling locations across assets that are typified by low risk, repeatable drilling and year round access; and
  • Following the completion of the Acquisitions and the Financing, the Company is expected to have significant financial flexibility and anticipates exiting 2014 with no net debt(5)(6)(7)

Notes:

  1. Based on August 2014 production averages for the Acquisitions.
  2. Company gross reserves being working interest share before deduction of royalties and without including any royalty interests. In respect of the Exoro Acquisition, based on the independent reserve report dated March 28, 2014 and effective December 31, 2013, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook. In respect of the Killam Asset Acquisition, based on the independent reserve report dated May 29, 2014 and effective April 30, 2014, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook.
  3. Based on Edmonton Light pricing assumption of $93.66/bbl and $4.30/mcf AECO, prior to hedging.
  4. Internally generated by management of the Company.
  5. Pro-forma the Acquisitions and Financing, including all costs associated with the transactions and cash flow generated from the effective date of the Acquisitions.
  6. Internally estimated by management of the Company.
  7. Non-IFRS measures. Please see Non-IFRS Measures under the Forward-Looking and Cautionary Statements.

Based on the total consideration payable for the Acquisitions, the transaction metrics are as follows:

Total Consideration: $113.8 million
Production(1): $45,980 per boe/d
Annual Cash Flow(2)(4): 3.8x
Proved Reserves(3): $15.56 per boe
Proved plus Probable Reserves(3): $10.11 per boe
Proved Reserves Value (10% Before Tax)(3): 0.84x
Proved plus Probable Reserves Value (10% Before Tax)(3): 0.61x

Notes:

  1. Based on August 2014 average production.
  2. Based on an annualized Q4 2014 production and cash flow estimates internally generated by management of the Company. Based on Edmonton Light pricing assumption of $93.66/bbl and $4.30/mcf AECO, prior to hedging.
  3. Company gross reserves being working interest share before deduction of royalties and without including any royalty interests. In respect of the Exoro Acquisition, based on the independent reserve report dated March 28, 2014 and effective December 31, 2013, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook. In respect of the Killam Asset Acquisition, based on the independent reserve report dated May 29, 2014 and effective April 30, 2014, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook.
  4. Non-IFRS measures. Please see Non-IFRS Measures under the Forward-Looking and Cautionary Statements.

The Acquisitions

The Acquisitions have the following characteristics:

Exoro Acquisition Killam Asset Acquisition
Total Consideration: $83.3 million(1) $30.5 million
Production(2): 1,950 boe/d
(60% liquids)
525 boe/d
(60% liquids)
Annual Cash Flow(3): $23.2 million $6.8 million
Proved Reserves(4): 6,208 MBOE
(65% liquids)
1,107 MBOE
(75% liquids)
Proved plus Probable Reserves ("2P") (4): 8,766 MBOE
(66% liquids)
2,488 MBOE
(82% liquids)
Reserve Life Index(5): Proved: 8.7 yrs
2P: 12.3 yrs
Proved: 5.8 yrs
2P: 13.0 yrs
Average Approximate Working Interest: 63% 94%
Land Base (acres): 132,281 gross
83,118 net
5,760 gross
5,440 net
Tax Pools(6): $78.7 million $30.5 million

Notes:

  1. Assuming a deemed price per share of Exoro of $1.30 and assumed net debt of $22.8 million (not inclusive of estimated transaction costs of $1.2 million).
  2. August 2014 average.
  3. Based on annualized Q4 2014 production and cash flow estimates internally generated by management of the Company. Based on Edmonton Light pricing assumption of $93.66/bbl and $4.30/mcf AECO, prior to hedging.
  4. Company gross reserves being working interest share before deduction of royalties and without including any royalty interests. In respect of the Exoro Acquisition, based on the independent reserve report dated March 28, 2014 and effective December 31, 2013, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook. In respect of the Killam Asset Acquisition, based on the independent reserve report dated May 29, 2014 and effective April 30, 2014, prepared by GLJ Petroleum Consultants Ltd. in accordance with NI 51-101 and the COGE Handbook.
  5. Based on current production. Figures are approximations.
  6. Subject to normal adjustments for an evaluation change between the effective date and the closing date. Exoro includes approximately $18.0 million of non-capital losses.

Financing

In connection with the Acquisitions, Elkwater has entered into an agreement with a syndicate of underwriters co-led by Desjardins Capital Markets ("Desjardins"), TD Securities Inc. (together with Desjardins, the "Joint Bookrunners") and FirstEnergy Capital Corp. (together with the Joint Bookrunners, the "Co-Lead Underwriters"), and including Clarus Securities Inc., Dundee Securities Ltd., National Bank Financial Inc., Canaccord Genuity Corp., Cormark Securities Inc., GMP Securities L.P. and Scotia Capital Inc. (together with the Co-Lead Underwriters, the "Underwriters") pursuant to which the Underwriters have agreed to purchase for resale, on a bought-deal private placement basis, 266,667,000 subscription receipts of the Company ("Subscription Receipts"), at a price of $0.375 per Subscription Receipt (the "Offering Price"), for aggregate gross proceeds of $100,000,125. The net proceeds from the Financing, in combination with existing cash on Elkwater's balance sheet and bank debt, will be used by the Company to fund the purchase price in respect of the Acquisitions. The Financing is expected to close on or about October 29, 2014 (the "Offering Closing Date").

Each Subscription Receipt will entitle the holder thereof to receive one Elkwater Share and one-half of one Warrant, without any further payment or action on the part of the holder, upon the Escrow Release Conditions (as defined below) having been satisfied and the earlier of: (i) four months and a day after the closing of the Financing; and (ii) upon the issuance of a final passport decision document evidencing a receipt on behalf of each of the securities regulatory authorities in each of the provinces of Canada in which Subscription Receipts have been sold, pursuant to Multilateral Instrument 11-102 -Passport System (the "Final Receipt") for a final prospectus (the "Prospectus") qualifying the issuance of the Elkwater Shares and the Warrants underlying the Subscription Receipts. Each Warrant shall entitle the holder thereof to purchase one Warrant Share at a price of $0.50 per Warrant Share for a period of 18 months following the Offering Closing Date. The Warrants shall provide that, if during the 18 month period following the Offering Closing Date, the Company's volume weighted average share price for 20 consecutive trading days on the TSXV (or other applicable exchange) equals or exceeds $0.65 per Elkwater Share, the Company may give notice to the holders of the Warrants that the Warrants will expire 30 days from the date of receipt of the notice, during which 30 day period the holders may exercise their Warrants in accordance with their terms.

In addition, the Underwriters will be entitled to an option (the "Underwriters' Option"), exercisable in whole or in part prior to the closing of the Financing, at the sole discretion of the Underwriters, to purchase up to an additional 40,000,050 Subscription Receipts at a price of $0.375 per Subscription Receipt, for additional gross proceeds of approximately $15 million.

The Subscription Receipts will be issued pursuant to a subscription receipt agreement (the "Subscription Receipt Agreement"). Pursuant to the Subscription Receipt Agreement, the gross proceeds from the Financing will be held in escrow pending delivery of notice (the "Release Notice") of all conditions to the completion of each of the Acquisitions (other than the payment of the purchase price for the Killam Assets and the funding of the aggregate cash consideration required pursuant to the Exoro Acquisition) being satisfied (the "Escrow Release Condition"). If: (i) all conditions to the completion of each of the Acquisitions (other than the payment of the purchase price for the Killam Assets and the funding of the aggregate cash consideration required pursuant to the Exoro Acquisition) are not satisfied by 5:00 p.m. (Calgary time) on December 20, 2014; (ii) either the Arrangement Agreement or the asset purchase and sale agreement in respect of the Killam Asset Acquisition is terminated at an earlier time; or (iii) the Company advises the subscription receipt agent, the Joint Bookrunners, or announces to the public, that it does not intend to proceed with one or both of the Acquisitions, holders of Subscription Receipts will receive a cash amount equal to the Offering Price of the Subscription Receipts and any interest that was earned thereon during the term of escrow less any applicable withholding taxes.

In addition, the Company has agreed to use reasonable commercial efforts to file the Prospectus qualifying the Elkwater Shares and the Warrants to be issued upon the exercise or deemed exercise of the Subscription Receipts in each of the provinces of Canada in which Subscription Receipts have been sold (the "Qualifying Jurisdictions") and obtain the Final Receipt within 30 days from the date of delivery of the Release Notice (the "Qualification Deadline").

The Financing is subject to certain conditions including normal regulatory approvals and specifically, the approval of the TSXV.

This press release is not an offer of subscription receipts, common shares or warrants for sale in the United States. The subscription receipts, common shares and warrants may not be offered or sold in the United States absent registration under the U.S. Securities Act of 1933, as amended, or an exemption from such registration. The Company has not registered and will not register the subscription receipts, common shares or warrants under the U.S. Securities Act of 1933, as amended. The Company does not intend to engage in a public offering of common shares in the United States.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Exoro Acquisition

Pursuant to the Arrangement Agreement, Elkwater has agreed to acquire all of the issued and outstanding common shares of Exoro, whereby Exoro Shareholders will receive, at their election, for each share of Exoro held, either: (i) 3.47 Elkwater Shares (at a deemed price of $0.375 per Elkwater Share) and 1.735 Warrants; (ii) $1.30 in cash; or (iii) a combination thereof. Elkwater will also assume Exoro's net debt, estimated to be $22.8 million, after accounting for severance and proceeds from the exercise of options associated with the Exoro Acquisition. Each Warrant shall entitle the holder thereof to purchase one Warrant Share at a price of $0.50 per Warrant Share for a period of 18 months following the Exoro Closing Date. The Warrants shall provide that, if during the 18 month period following the Exoro Closing Date, the Company's volume weighted average share price for 20 consecutive trading days on the TSXV (or other applicable exchange) equals or exceeds $0.65 per Elkwater Share, the Company may give notice to the holders of the Warrants that the Warrants will expire 30 days from the date of receipt of the notice, during which 30 day period the holders may exercise their Warrants in accordance with their terms.

Completion of the Arrangement is subject to the satisfaction of a number of conditions, including the receipt of requisite shareholder, court and regulatory approvals (including the TSXV), and satisfaction of certain other closing conditions that are customary for a transaction of this nature. The Arrangement also requires the approval of the Court of Queen's Bench of Alberta. The Arrangement will need to be approved by not less than 66 2/3% of the votes cast by Exoro Shareholders, voting in person or by proxy, at a special meeting expected to be held on or about November 19, 2014 (the "Exoro Meeting"). The mailing of the information circular to the Exoro Shareholders regarding the Exoro Meeting is expected to occur in late October 2014. The Exoro Closing Date is expected to occur on November 20, 2014, provided that all shareholder, court and regulatory approvals are obtained.

FirstEnergy Capital Corp. is acting as financial advisor to Exoro in connection with the Arrangement and have provided the board of directors of Exoro (the "Exoro Board") with their verbal opinion that, as of the date thereof, subject to the review of final documentation related to such opinions and the Arrangement, and certain assumptions, limitations and qualifications contained therein, the consideration to be received by the Exoro Shareholders is fair, from a financial point of view, to the Exoro Shareholders.

The Exoro Board has unanimously approved the Arrangement Agreement and, based on a number of factors, including the fairness opinion provided by FirstEnergy Capital Corp., determined that the Arrangement is in the best interests of Exoro, and unanimously resolved to recommend that Exoro Shareholders vote in favour of the Arrangement. Management, directors and certain shareholders of Exoro holding approximately 59.5% of the issued and outstanding Exoro Shares have entered into support agreements to vote their Exoro Shares in favour of the Arrangement at the Exoro Meeting.

The board of directors of Elkwater has unanimously approved the Arrangement Agreement and the asset purchase and sale agreement in respect of the Killam Asset Acquisition and determined that the Acquisitions are in the best interests of Elkwater.

Under the terms of the Arrangement Agreement, Exoro has agreed that it will not solicit or initiate any inquiries or discussions regarding any other business combination or sale of assets. Exoro has granted Elkwater the right to match any superior proposals. The Arrangement Agreement also provides for a reciprocal non-completion fee of $3.3 million payable under certain circumstances. For more information on the Arrangement and the Arrangement Agreement, please refer to the full Arrangement Agreement, a copy of which will be filed by Elkwater on SEDAR and will be available for viewing under its profile on www.sedar.com.

Advisors

Desjardins Capital Markets is acting as lead financial advisor to Elkwater with respect to the Acquisitions. Dundee Securities Ltd. is acting as financial advisor to Elkwater with respect to the Acquisitions.

FirstEnergy Capital Corp. is acting as financial advisor to Exoro in connection with the Arrangement.

About Elkwater

Elkwater is a publicly traded Calgary, Alberta-based company engaged in the oil and gas exploration and development industry. Elkwater shares are listed on the TSX Venture Exchange under the trading symbol "ELW".

Forward-Looking and Cautionary Statements

Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, timing for completion of the Acquisitions and the Financing, expectations with respect to the Acquisitions, purchase price to be paid in respect of the Killam Asset Acquisition, the characteristics and attributes of the assets to be acquired pursuant to the Killam Asset Acquisition, the effect of the Acquisitions on the Company, the benefits to the Company, the increase to the borrowing base of the Company's credit facility, receipt of approvals required for the Acquisitions, cash flow, operating netbacks, the satisfaction of the Escrow Release Conditions and changing the name of the Company to "Striker Exploration Corp." . Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. The forward-looking statements are founded on the basis of expectations and assumptions made by Elkwater which include, but are not limited to, the timing for completion of the Acquisitions and the Financing, receiving all approvals (including regulatory and shareholder approvals) in a timely manner, characteristics of the Assets, decline rates, average production, exit production, cash flow and capital expenditures. Forward-looking statements are subject to a wide range of risks and uncertainties, and although Elkwater believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized.

Although the Company believes that the expectations reflected in its forward-looking information are reasonable, undue reliance should not be placed on forward-looking information because the Company can give no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.

Any number of important factors could cause actual results to differ materially from those in the forward -looking statements including, but not limited to, regulatory and third party approvals not being obtained in the manner or timing anticipated, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in general market conditions and other factors more fully described from time to time in the reports and filings made by Elkwater with securities regulatory authorities.

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking information. The forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to United States Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

BOE Disclosure. The term barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel (6Mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All BOE conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

This press release may contain future-oriented financial information and financial outlook information (collectively, "FOFI") about the Company's prospective results of operations, cash flows, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this press release was made as of the date of this press release and was provided for the purpose of describing the anticipated effects of the Acquisitions and the Financing on the Company's business operations. The Company disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this document should not be used for purposes other than for which it is disclosed herein.

Statements relating to "reserves" are also deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and that the reserves can be profitably produced in the future. Actual reserve values may be greater than or less than the estimates provided herein.

Although the Company believes that the expectations and assumptions on which such forward-looking information and FOFI is based are reasonable, undue reliance should not be placed on the forward-looking information and FOFI because the Company can give no assurance that they will prove to be correct. Since forward-looking information and FOFI addresses future events and conditions, by its very nature, they involve inherent risks and uncertainties. The Acquisitions and the Financing and the other transactions referred to in this press release may not be completed on the anticipated time frames or at all and the Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, the forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that the Company will derive there from. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on the Company's future operations and such information may not be appropriate for other purposes.

Non-IFRS Measures. This press release provides certain financial measures that do not have a standardized meaning prescribed by IFRS. These non-IFRS financial measures may not be comparable to similar measures presented by other issuers. Net debt, cash flow from operations and operating netback are not recognized measures under IFRS. Management believes "net debt" is a useful supplemental measure of the total amount of current and long-term debt of the Company. Management believes that in addition to net income (loss), cash flow from operations and operating netback are useful supplemental measures that demonstrate the Company's ability to generate the cash necessary to repay debt or fund future capital investment. Investors are cautioned, however, that these measures should not be construed as an alternative to net income (loss) determined in accordance with IFRS as an indication of the Company's performance. Elkwater's method of calculating these measures may differ from other companies and accordingly, they may not be comparable to measures used by other companies. Net debt is calculated as bank debt plus working capital deficiency adjusted for risk management contracts. Cash flow from operations is calculated by adjusting net income (loss) for other income, unrealized gains or losses on financial derivative instruments, accretion, share based compensation, impairment and depletion and depreciation. Operating netback is calculated based on oil and gas revenue less royalties and operating and transportation expenses.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Elkwater Resources Ltd.
    Doug Bailey
    President and Chief Executive Officer

    Elkwater Resources Ltd.
    Neil Burrows
    Vice President, Finance and Chief Financial Officer

    Elkwater Resources Ltd.
    Suite 2000, 840 7th Avenue S.W.
    Calgary, Alberta T2P 3G2
    403-262-0242