The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Argent Energy Trust announces closing of bought deal trust unit financing and acquisition of oil producing assets

Thursday, August 15, 2013

Argent Energy Trust announces closing of bought deal trust unit financing and acquisition of oil producing assets

08:48 EDT Thursday, August 15, 2013


CALGARY, Aug. 15, 2013 /CNW/ - Argent Energy Trust ("Argent" or the "Trust") (TSX: AET.UN) is pleased to announce that it has completed its previously announced bought deal financing and has issued 8,160,000 trust units of the Trust (the "Trust Units") at a price of $10.20 per Trust Unit (the "Offering"), which includes 800,000 Trust Units issued in conjunction with the exercise of the over-allotment option granted to the underwriters. Total gross proceeds of the Offering to the Trust were $83,232,000. The syndicate of underwriters was co-led by Scotiabank, CIBC and RBC Capital Markets, and included TD Securities Inc., BMO Capital Markets, National Bank Financial Inc., Canaccord Genuity Corp. and FirstEnergy Capital Corp.

The net proceeds of the Offering will initially be used to repay the entire amount outstanding under Argent's credit facility (the "Credit Facility"), which indebtedness was primarily incurred in connection with the acquisition of certain oil producing properties in Kansas and Colorado (the "Acquisition") and the purchase of the Eagle Ford Deep Rights, as further described below under the headings "Acquisition and New Core Area" and "Purchase of Deep Rights ORRI", and capital expenditures by the Trust since the completion of the offering of 6.00% convertible unsecured subordinated debentures of the Trust on June 4, 2013. Following the closing of the Offering, and after taking into account the initial closing of the Acquisition and the purchase of the Eagle Ford Deep Rights, there will be no amounts outstanding under the Credit Facility. The Trust values a strong balance sheet and the maximum financial flexibility to avail itself of future opportunities.

Acquisition and New Core Area

The Trust is also pleased to announce the initial closing of its previously announced acquisition of producing petroleum properties in various counties in Kansas and Colorado (the "Acquired Assets"). The initial closing of the Acquisition occurred on August 8, 2013 for a purchase price of US$34 million and the remainder of the Acquired Assets are expected to be acquired by Argent on August 22, 2013 for a purchase price of approximately US$11 million, which is expected to be funded using proceeds from the Offering and available cash flow from operations, resulting in an aggregate purchase price for the Acquired Assets of approximately US$45 million (subject to customary adjustments). The Acquired Assets are principally oil properties estimated to cover approximately 35,000 net acres of land. Working interest oil production from the Acquired Assets in June 2013 was approximately 450 barrels per day, which Argent expects to maintain through the remainder of 2013 and into 2014 with minimal operational activity or capital investment.

The Acquisition is accretive on cash flow per unit, payout ratio and sustainability ratio basis, provides geographic diversification, adds immediate incremental oil production and reserves to the overall asset base of Argent, and establishes a new, low decline (12% annually), core area for the Trust.

Purchase of Deep Rights ORRI

The Trust is also pleased to announce the closing of its previously announced purchase of the Eagle Ford Shale "Deep Rights" for US$30 million pursuant to a call option that was granted to Argent in connection with the acquisition of certain oil and gas assets from Denali Oil & Gas in connection with the Trust's initial public offering in August 2012.

About Argent Energy Trust

Argent is a "mutual fund trust" under the Income Tax Act (Canada). Argent's objectives are to create stable, consistent returns for investors through the acquisition and development of oil and natural gas reserves and production with low-risk exploitation potential, located primarily in the United States, and to pay out a portion of available cash to holders of the Trust's Units on a monthly basis.  Further information pertaining to Argent and the Trust Units may be found on or

The Trust Units and 6.00% convertible unsecured subordinated debentures of the Trust are traded on the Toronto Stock Exchange under the symbols AET.UN and AET.DB, respectively.

Forward Looking Information

This press release includes forward-looking information within the meaning of applicable Canadian and United States securities legislation.  All statements, other than statements of historical facts, that address activities, circumstances, events, outcomes and other matters that Argent budgets, forecasts, plans, projects, estimates, expects, believes, assumes or anticipates (and other similar expressions) will, should or may occur in the future, are considered forward-looking information.  In particular, forward-looking information contained in this press release includes, but is not limited to, information and statements concerning the Acquisition and the Acquired Assets; the performance and production characteristics of the Acquired Assets; the use of proceeds from the Offering; that the remainder of the Acquired Assets will be acquired as expected and the source of funds for the remainder for the Acquisition; the amount of borrowings under the Credit Facility; and the Trust's ability to maintain working interest production on the Acquired Assets with minimal operational activity or capital investment.

In addition, statements relating to "reserves" are by their nature forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the reserves described can be profitably produced in the future. The forward-looking information provided in this press release is based on management's current beliefs, expectations and assumptions, based on currently available information as to the outcome and timing of future events.  Argent cautions that its future oil, natural gas and natural gas liquids production, revenues, cash flows, liquidity, plans for future operations, expenses, outlook for oil and natural gas prices, timing and amount of future capital expenditures, and other forward-looking information is subject to all of the risks and uncertainties normally incident to the exploration for and development and production and sale of oil and gas.

These risks include, but are not limited to, oil and natural gas price volatility, Argent's access to cash flows and other sources of liquidity to fund its capital expenditures, its level of indebtedness, its ability to replace production, the impact of the current financial climate on Argent's anticipated business and financial condition, a lack of availability of or increases in costs of goods and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating future oil and gas production or reserves, economic conditions and other risks as described in documents and reports that Argent files with the securities commissions or similar authorities in applicable Canadian jurisdictions on the System for Electronic Document Analysis and Retrieval (SEDAR).  Any of these factors could cause Argent's actual results and plans to differ materially from those contained in the forward-looking information.

Forward-looking information is subject to a number of risks and uncertainties, including those mentioned above, that could cause actual results to differ materially from the expectations set forth in the forward-looking information.  Forward-looking information is not a guarantee of future performance or an assurance that our current assumptions and projections are valid.  All forward-looking information speaks only as of the date of this press release, and Argent assumes no obligation to, and expressly disclaims any obligation to, update or revise any forward-looking information, except as required by law.  You should not place undue reliance on forward-looking information.  You are encouraged to closely consider the additional disclosures and risk factors contained in Argent's periodic filings on SEDAR that discuss in further detail the factors that could cause future results to be different than contemplated in this press release.

SOURCE: Argent Energy Trust

For further information:

Brian Prokop
Co-Chief Executive Officer and President
Argent Energy Trust
(403) 770-4807

Sean Bovingdon 
Chief Financial Officer 
Argent Energy Trust 
(403) 770-4803

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail App

    The New Globe and Mail App for iPhone®, iPad® and Apple Watch download

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Secure Service
Customer Service
Advertising Privacy
Globe Recognition
Mobile Apps
Other Sections