Business
Compton reports $150.2 million asset sales, further debt reduction & increased capital program
Compton reports $150.2 million asset sales, further debt reduction & increased capital program
About this update from Cullinan Metals Corp
[{"type":"text","content":"\n\n\n\n Jun. 7, 2010 (Canada NewsWire Group) -- Compton Petroleum Corporation (TSX - CMT, NYSE - CMZ) is pleased to announce that it has entered into purchase and sale agreements relating to the disposition of a portion of its natural gas assets located in the Niton and Gilby areas in Central Alberta. Gross proceeds from the transactions are expected to be $150.2 million, which will be used to reduce outstanding indebtedness and provide additional capital for Compton's 2010 development program.\nThe properties to be sold produced approximately 3,100 boe/d on a combined basis at the effective date of the transactions and were assigned net proved and net proved plus probable reserves of 9.4 MMboe and 14.1 MMboe, respectively, at December 31, 2009. This results in overall sale metrics of $48,500 per equivalent flowing barrel of production and $15.90 and $10.64 per BOE of reserves, for proved and proved plus probable, respectively.\nUpon completion of the transactions, Compton will retain a dominant position in the Niton area, providing significant upside potential through its multiple zone development opportunities and contiguous land blocks. The Corporation plans to drill 11 gross wells in this area in 2010, targeting a number of prospective formations. Compton will continue to hold a significant overall land position, totaling 165,019 gross (124,425 net) acres in the area, of which 93,105 gross (77,545 net) acres are undeveloped.\nThese property sales represent another step in Compton's continuing initiatives to reduce debt, streamline operations and better position itself for growth opportunities.\n"These transactions highlight the value of our assets, which is not currently being reflected in our share price," said Tim Granger, President and Chief Executive Officer. "The overall deal metrics are excellent, resulting in high per flowing barrel and reserve values as compared to other recent natural gas transactions. They are also consistent with our objective to improve financial flexibility while preserving significant upside potential for shareholders. We continue to believe that Compton's asset base can generate solid returns and production growth in a conservative natural gas price environment."\nThe transactions are expected to be accretive to Compton and its shareholders as the Corporation's forward loo...