Press release from Marketwire
Storm Resources Ltd. Announces Closing of Asset Disposition
Thursday, October 18, 2012
Storm Resources Ltd. Announces Closing of Asset Disposition17:08 EDT Thursday, October 18, 2012CALGARY, ALBERTA--(Marketwire - Oct. 18, 2012) -STORM RESOURCES LTD. ("Storm") (TSX VENTURE:SRX) advises that the disposition of 150 Boe per day of production in the Mica area of northeast British Columbia, as announced on September 6, 2012, has closed.Proceeds from the disposition will be applied in reduction of debt. The disposition will result in Storm's bank credit facility being reduced from $70 million to $62 million. The disposition of Mica ($13.5 million), the previously disclosed sales of Chinook Energy Inc. shares ($2.2 million) and Storm's Red Earth property on July 24, 2012 ($2.4 million), will result in an $18.1 million reduction to net debt, which was $53.7 million at the end of the second quarter. Net debt includes the working capital deficiency but does not include the value of Storm's public company investments. Including the value of Storm's public company investments, net debt exiting 2012 is forecast to be approximately $37 million. This is based on guidance previously provided in the release of second quarter results on August 13, 2012. The disposition of Mica reflects Storm's commitment to maintaining debt levels at a reasonable multiple of cash flow in order to preserve financial flexibility to pursue growth opportunities, or to accelerate capital investment on development activities at existing properties if results are supportive of doing so.Storm Resources Ltd. began operations in August 2010. Storm is headquartered in Calgary, Alberta and is active in the Horn River Basin and Umbach areas of northeast British Columbia, and at Grande Prairie in northwest Alberta.READER ADVISORIESBoe Presentation - For the purpose of calculating unit revenues and costs, natural gas is converted to a barrel of oil equivalent ("Boe") using six thousand cubic feet ("Mcf") of natural gas equal to one barrel of oil unless otherwise stated. Boe may be misleading, particularly if used in isolation. A Boe conversion ratio of six Mcf to one barrel ("Bbl") 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 measurements and conversions in this report are derived by converting natural gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil. Mboe means 1,000 Boe.Forward-Looking Statements - This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward-looking statements and information concerning the combined company's working capital and bank facility, reserves, undeveloped land holdings and anticipated benefits from the disposition. The forward-looking statements and information are based on certain key expectations and assumptions made by Storm, including: expectations and assumptions concerning prevailing commodity prices and exchange rates; applicable royalty rates and tax laws; future well production rates and reserve volumes; the timing of receipt of regulatory and shareholder approvals; the performance of existing wells; the success obtained in drilling new wells; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services. Although Storm believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Storm can give no assurance that they will prove to be correct.Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: the risks associated with the oil and gas industry in general such as 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 reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and dispositions; failure to realize the anticipated benefits of acquisitions and dispositions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. There are risks also inherent in the nature of the proposed disposition, including failure to realize anticipated production or reserve increases and decreases and incorrect assessments of values or future capital and operating costs.Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Storm's financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), and at Storm's website (www.stormresourcesltd.com). The forward-looking statements and information contained in this press release are made as of the date hereof and Storm undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Brian LavergneStorm Resources Ltd.President and Chief Executive Officer(403) 817-6145ORDonald McLeanStorm Resources Ltd.Chief Financial Officer(403) 817-6145ORCarol KnudsenStorm Resources Ltd.Manager, Corporate Affairs(403) 817-6145www.stormresourcesltd.comNEITHER 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.