PETRUS ANNOUNCES ASSET DISPOSITION

PETRUS ANNOUNCES ASSET DISPOSITION

CALGARY, ALBERTA – Petrus Resources Ltd. (“Petrus” or the “Company”) is pleased to announce that it has sold its oil and natural gas interests in the Peace River area of Alberta to Rising Star Resources Ltd. (“Rising Star”), a private company, for total consideration of $30.0 million subject to customary closing adjustments (the “Disposition”). The consideration is comprised of $29.0 million in cash and 1.0 million shares of Rising Star at a deemed value of $1.00 per share. The Disposition closed on July 8, 2016 and has an effective date of April 1, 2016.

ASSET DISPOSITION
In June 2016, production in the Peace River area averaged approximately 1,000 boe per day (55% oil and natural gas liquids), which comprised approximately 12% of the Company’s total production. The Disposition includes facility interests and 85,530 net acres of undeveloped land. The Disposition is beneficial to the Company by reducing overall indebtedness, lowering per unit operating costs, and reducing future liabilities. Excluding Peace River from the first quarter 2016 results generates a 19% reduction in the Company’s overall operating costs per boe, and a 17% improvement to the field netback. Following transfer of the assets, Petrus’ liability management ratio (LMR) will improve from 2.6 to approximately 3.0. The cash proceeds from the Disposition will initially be used to reduce the amount owing under the Company’s revolving credit facility to approximately $84 million. The borrowing capacity under the facility was reduced as a result of the Disposition, from $120 million to $106 million, leaving ample liquidity for Petrus to conduct ongoing operations. Petrus will also prepay a portion of its second-lien term loan, reducing the amount outstanding to $42 million and lowering annual interest costs. Pro forma the Disposition, the Company’s total net debt will be reduced to approximately $124 million, down from $226.7 million at the end of 2015.

 

ABOUT PETRUS
Petrus is a public Canadian oil and gas company focused on property exploitation and strategic acquisitions in Alberta. The Company has established a sustainable platform of low decline, low operating cost assets with a multi-year inventory of repeatable, low risk, economic drilling locations. Petrus has 45.3 million shares issued and outstanding.
For further information, please contact:
Kevin Adair, P.Eng.
President and CEO
T: (403) 930-0888
E: kadair@petrusresources.com
Website: www.petrusresources.com

SOURCE:  http://www.petrusresources.com/files/News/2016/July%2011%202016%20News%20Release%20Final.pdf

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