Ember Resources Inc.
TSX : EBR

Ember Resources Inc.

October 01, 2010 08:00 ET

Ember Resources Inc. Reports Credit Facility Update

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Ember Resources Inc. ("Ember") (TSX:EBR) announced today that it has entered into an agreement to amend its credit facility with its lenders. The agreement extends the September 30, 2010 facility renewal process to October 31, 2010 under the same terms as previously announced. The key provisions contained in the credit facility and the amendment are as follows:

  • The existing $89.5 million facility consists of an $87 million production facility and a $2.5 million working capital facility.
  • The term out date for the facility has been extended from September 30, 2010 to October 31, 2010. The term maturity date for the facility remains unchanged at April 30, 2011. The facility will continue to revolve until October 31, 2010.

Ember is currently evaluating a number of initiatives to either replace or supplement the existing credit facilities. The initiatives include but are not limited to increased hedging, refinancing of the existing syndicate, project financing for undeveloped reserves, potential asset sales, equity financing, or other actions the board deems appropriate.

Hedging Program Update

Ember's hedging program is a risk-management tool that aims to maintain budgeted levels of cash flow and capital expenditures and reduce balance sheet risk. The Company hedges both its natural gas price and U.S dollar exposure. Short term weakness in the Canadian dollar and recent improvements in natural gas pricing have allowed the Company to add to its hedge position.

Approximately 38% of Ember's remaining production for 2010 is currently hedged and a portion of 2011 is hedged under a number of contracts as summarized below:

  1. June 1, 2010 to December 31, 2010 – 5.7 mmcf/day collar at a weighted average minimum price at AECO of $4.73 per mcf and a maximum price of $6.92 per mcf
  2. September 1, 2010 to March 31, 2011 – 3.0 mmcf/day swap at a price at AECO of USD $4.69/mcf
  3. October 1, 2010 to December 31, 2010 – 6.0 mmcf/d basis swap at a price at AECO of USD $0.385/mcf
  4. January 1, 2011 to December 31, 2011 – 6.0 mmcf/d basis swap at a price at AECO of USD $0.545/mcf
  5. June 1, 2010 to December 31, 2011 – Forward sale of $1 million USD/month at an exchange rate of 1.0725 to Canadian dollars.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements including anticipated levels of bank debt, anticipated capital expenditures, development plans expectations pertaining to various matters related to the credit facility and anticipated financing arrangements and other alternatives. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity prices and exchange rate fluctuation, uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures and uncertainties related to the extension of the credit facilities and the implementation of alternative transactions. Actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward looking statements and accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur. Except as required by law, Ember undertakes no obligation to update or revise any forward-looking statements. Additional information on these and other factors that could affect the Company's operations or financial results are included in the Company's filings with Canadian securities regulatory authorities.

Ember Resources Inc. is a resource company specializing in coalbed methane (CBM) with extensive land and resource holdings in Alberta, Canada. Ember's shares are traded on the Toronto Stock Exchange under the trading symbol "EBR".

Contact Information

  • Ember Resources Inc.
    Mr. Douglas A. Dafoe
    President & CEO
    403 270-0803
    403 270-2850 (FAX)
    or
    Ember Resources Inc.
    Mr. Terry S. Meek
    Executive Vice-President & COO
    403 270-0803
    403 270-2850 (FAX)
    or
    Ember Resources Inc.
    Mr. Bruce C. Ryan
    Vice-President Finance & CFO
    403 270-0803
    403 270-2850 (FAX)