Business
Kelt Enters into an Agreement to Sell Its Inga Assets
Calgary, Alberta--(Newsfile Corp. - July 22, 2020) - Kelt Exploration Ltd. (TSX: KEL) ("Kelt" ...
About this update from Kelt Exploration Ltd.
[{"type":"text","content":"Kelt Enters into an Agreement to Sell Its Inga AssetsCalgary, Alberta--(Newsfile Corp. - July 22, 2020) - Kelt Exploration Ltd. (TSX: KEL) (\"Kelt\" or the \"Company\") has entered into an agreement to sell its Inga/Fireweed/Stoddart assets (\"Inga Assets\") in British Columbia that are held by its wholly owned subsidiary, Kelt Exploration (LNG) Ltd. (\"Kelt LNG\"), to ConocoPhillips (the \"Purchaser\"). Kelt will receive cash proceeds of $510.0 million, prior to closing adjustments, and the Purchaser will assume certain specific financial obligations related to the Inga Assets in the amount of approximately $41.0 million.All of the Company's remaining British Columbia assets, including the Montney lands at Oak/Flatrock will remain with Kelt LNG.The effective date for the transaction is July 1, 2020. Completion of the transaction is subject to customary closing conditions, including receipt of regulatory approvals, including under the Competition Act (Canada). Closing is expected to occur on or around August 21, 2020.Kelt has a large inventory of future drilling locations for which the net present value was not being reflected in the Company's current valuation. As a result, the Company's board of directors has determined that the sale of its Inga Assets, representing a monetization of approximately 27% of the Company's Montney acreage, is an opportunity to bring forward the value of certain assets and at the same time put the Company in a position of increased financial strength during an uncertain economic environment. Kelt's remaining Montney land holdings of 374,528 net acres (585 net sections) continues to place the Company as one of the largest Montney players in the Western Canadian Sedimentary Basin.Kelt, pro-forma the completion of the sale of its Inga Assets, will be in a strong financial position with no debt and a large Montney land acreage position to grow the Company's production base as commodity prices improve. In addition to its three remaining Montney play areas, the Company will also be in a position to develop its Charlie Lake play in Alberta.A comparision of Kelt pre and post completion of the asset sale transaction is summarized in the following table:[$ thousands]KELTpre-transactionPRO-FORMA KELT [1]post-transactionPercent changePRODUCTION(for the five months ended May 31, 2020) Oil & NGLs (bbls/d)14,3...