TSX: TUI.UN
CALGARY, July 30 /CNW/ - True Energy Trust ("True") is pleased to
announce that it has completed its previously announced divestiture of the
majority of its oil and natural gas assets in Saskatchewan for gross proceeds
of $93 million, prior to closing adjustments. The details of the transaction
and assets sold were set forth in True's press release dated July 8, 2009. Net
proceeds from the transaction have been utilized by True to reduce bank
indebtedness thereby providing True with the ability to move forward with
substantially improved financial flexibility.
In conjunction with completion of the Divestiture, True has entered into
a new banking syndicate commitment that will provide True with a credit
facility of $85 million. The facility will consist of a $10 million demand
operating facility provided by one Canadian bank and a $75 million extendible
revolving term credit facility syndicated by one Canadian chartered bank and
one Canadian financial institution. The revolving period on the revolving term
credit facility will end on June 30, 2010, unless extended for a further 364
day period. Should the facilities not be renewed they will convert to 366 day
non-revolving term facilities on the renewal date. The borrowing base will be
subject to renewal on March 31, 2010.
True's total net debt, excluding an unrealized commodity contract asset
of $13.8 million, future income taxes and asset retirement obligations, upon
completion of these dispositions is anticipated to be approximately $110
million, being approximately $28 million in net debt outstanding on the credit
facility including working capital adjustments and $82 million in convertible
debentures (liability component).
On a go forward basis, True's production is forecast to be approximately
6,500 boe/d, comprised of 31.7 mmcf/d of natural gas and 1,230 bbls/d of
light/medium oil. True is forecasting a 2009 exit production rate of 7,000
boe/d based on normal decline rates and risked production adds from True's
capital program. True's capital expenditure program for the 3rd and 4th
quarters is anticipated to be approximately $10 million. Upon closing, True
will have 274,298 net acres of undeveloped land with 320 drilling locations
identified in the go forward portfolio.
True has forward sold 65% of its natural gas production for Q3 - Q4 2009
for an average of $7.26 CAD/mcf and 21.5% of Q1 - Q2 2010 natural gas
production hedged at an average of $7.96 CAD/mcf. In addition, 500 bbl/d of
oil for Q3 - Q4 is hedged by way of a costless collar of $52.30 CAD x $80.70
CAD.
With its improved financial flexibility, True plans to seek opportunities
to consolidate assets that complement its focused asset base either through
geographic fit, technical expertise or future development potential.
An updated corporate presentation has been posted at
www.trueenergytrust.com.
