Press release from Marketwire
Cancen Oil Canada Inc. Reports Record First Quarter 2013 Results with Significant Increase in Revenues, $5.35 Million of Secured Debt Financing and a Management Role Change
Thursday, May 30, 2013
Cancen Oil Canada Inc. Reports Record First Quarter 2013 Results with Significant Increase in Revenues, $5.35 Million of Secured Debt Financing and a Management Role Change22:09 EDT Thursday, May 30, 2013
CALGARY, ALBERTA--(Marketwired - May 30, 2013) -
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Cancen Oil Canada Inc. ("Cancen" or the "Company") (TSX VENTURE:COI) a provider of specialized services to the energy sector, is pleased to announce that it has filed its Financial Statements and related Management's Discussion and Analysis for the quarter ended March 31, 2013 which are available on the Company's profile at www.sedar.com.
The Company also announces it has entered into term sheets for a total of $5.35 million of secured debt financing with a Canadian based mezzanine lender as well as individual investors expected to close on or before June 7, 2013, subject to regulatory approval and the completion of formal documentation. The net proceeds of this debt financing will be used for the estimated capital expenditure and working capital requirements of the Company for the balance of 2013. The proposed capital expenditures are primarily focused on bringing the Chamberlain facility operational by the end of the fourth quarter which will move the Company towards becoming self-sustaining.
2013 First Quarter Highlights
- The Company enhanced operations at its Silver Valley Custom Treating Facility to increase capacity for receipts of produced water and emulsion volumes, resulting in a quarter over quarter increase in revenues.
- The Company, through its relationship with Astra Midstream, transacted a record quarter of crude oil volumes into the market, further contributing to profitability of Silver Valley.
- 490% increase in revenues in the first quarter of 2013 over the first quarter of 2012. The improved volumes in the first quarter resulted in a 142% increase in revenues in the first quarter of 2013 over the fourth quarter of 2012.
- The Company completed its plan for bringing the disposal well at its Chamberlain site on line and is prepared to proceed with site development in the second half of the year.
Future Plans and Outlook
The Company's near term capital expenditure program consists of a disposal well workover and site construction and initiating operations at the Chamberlain Facility, improvements to enhance the operational efficiencies and expand services at the Silver Valley Facility and to develop the Athabasca facility as a waste water disposal facility (collectively the "Facilities"). The Company will continue to evaluate its opportunities to expand the Company through additional and complementary service lines, organic growth and strategic acquisitions.
Secured Debt Financings
The Company has entered into term sheets for a total of $5.35 million of secured debt financing, subject to regulatory approval.
The Company has entered into a term sheet for a secured debt facility of $4.25 million with a Canadian based mezzanine lender (the "Lender") with a term to June 30, 2014. The facility provides for initial funding of $1.5 million at closing, with the remaining $2.75 million to be available upon completion of the workover of the Company's disposal well at Chamberlain. The facility bears interest at a rate of 12% per annum and the Company has agreed to issue the Lender 1,333,333 common shares in the capital of the Company ("Common Shares") at closing, subject to a four month hold period of which 666,666 Common Shares will be held in escrow and released pro-rata with further facility advances.
The Company has also entered into term sheets for a secured debt facility for gross proceeds of $1.1 million with a group of investors ("Investor Lenders"), which includes an affiliate of an officer and director, with a term to June 30, 2014. The facility also bears interest at a rate of 12% per annum and requires a deferred payment on repayment of the loan of $66,000 or 165,000 Common Shares, at the option of the Investor Lenders.
Collectively, these debt financings (the "Debt Financings") provide the capital to fund the estimated capital expenditures and working capital requirements of the Company for the balance of 2013.
Management Role Change
Effective June 1, 2013 Brian Petersen will transition from CEO to Managing Director, Capital Markets, a role closely aligned with his skill set and experience in the capital markets.
"We all thank Brian for his significant contribution to our success to date, and welcome his continued commitment of support," said Keith Talbot, founder and Director, "Our leadership team is well equipped to execute the Company's operational and growth plans."
The CEO responsibilities will be assumed by other members of the existing management team.
Cancen provides specialized services to the energy sector, specifically to companies involved in the exploration, extraction and production of oil and natural gas in Western Canada. Cancen develops and constructs facilities in proximity to its customers to provide treatment of crude oil emulsion, terminalling, storage and marketing of oil and disposal of production water.
This press release contains forward-looking statements and information that are based on the beliefs of management and reflect the Company's current expectations. When used in this press release, the words "estimate", "project", "belief", "anticipate", "intend", "expect", "plan", "predict", "may" or "should" and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. The forward-looking statements and information in this press release include information relating to the anticipated closing of the Debt Financings. Such statements and information reflect the current view of the Company with respect to risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.
The Company cautions that the foregoing list of material factors is not exhaustive. When relying on Cancen's forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company has also assumed that material factors will not cause any forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors.
FOR FURTHER INFORMATION PLEASE CONTACT:
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:
Cancen Oil Canada Inc.
(403) 262-2783 ext 108
Cancen Oil Canada Inc.
Chief Financial Officer
(403) 262-2783 ext 109