Business
Compton closes additional portion of overriding royalty sale
Compton closes additional portion of overriding royalty sale
About this update from Cullinan Metals Corp
[{"type":"text","content":"\n\n\n\nJan. 4, 2010 (Canada NewsWire Group) -- CALGARY, Jan. 4 /CNW/ -- Compton Petroleum Corporation (TSX - CMT, NYSE - CMZ) is pleased to announce the exercise of the option by a purchaser to acquire the remaining 2.5% of the previously announced 5.0% overriding royalty ('ORR'). The purchaser has acquired half the optioned 2.5% ORR for proceeds of $23.8 million and has expressed its intention to acquire the remaining portion of the optioned 2.5% ORR by January 31, 2010 for additional proceeds of $23.8 million subject to completion of due diligence and financing.The aggregate sale price of the ORR from initial sale plus the exercise of the option total $95.0 million and represents a 5% ORR on the gross production revenue on the Corporation's existing land base less certain transportation costs and marketing fees, calculated on a monthly basis. The sales concluded to date resulted in a realized sale price of $71.3 million and represent an ORR of 3.75%. Scotia Waterous Inc. acted as a financial advisor to Compton with respect to the transactions.The total proceeds will be used to reduce the Corporation's bank debt. Compton's bank debt is approximately $105 million at December 31, 2009, a reduction of $245 million from the peak bank debt level in 2009.\"The exercise of this portion of the sale of the overriding royalties provides additional funds to reduce our debt level,\" said Tim Granger, President and Chief Executive Officer. \"Added to our previous debt reduction initiatives this year, we now have a stronger financial footing to carry out our 2010 budget and operating plans, which represents an increased drilling and capital program over 2009. We anticipate that our activities in 2010 will demonstrate the value of our substantial asset base.\"AdvisoriesForward-Looking StatementsCertain information regarding the Corporation contained herein constitutes forward-looking information and statements and financial outlooks (collectively, \"forward-looking statements\") under the meaning of applicable securities laws, including Canadian Securities Administrators' National Instrument 51-102 Continuous Disclosure Obligations and the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include estimates, plans, expectations, opinions, forecasts, projections, guidance, or other statements that are n...