CALGARY, July 6, 2018 /CNW/ - Paramount Resources Ltd.
(TSX: POU) ("Paramount" or the "Company") is pleased to announce
that it has closed the previously announced sale of its oil and gas
properties and related infrastructure at Resthaven / Jayar in the
Kakwa region (the "Assets") to Strath Resources Ltd.
("Strath"). Consideration received by Paramount totaled
$340 million, and included
$170 million in cash (subject to
customary post-closing adjustments), 85 million Strath common
shares and 10-year warrants to acquire 8.5 million Strath common
shares. As a result, Paramount holds an approximate 16%
equity interest (undiluted) in Strath and Jim Riddell, Paramount's President and Chief
Executive Officer, has joined Strath's Board of Directors. The cash
consideration received will be used to reduce outstanding
indebtedness under Paramount's credit facility.
Expected second half 2018 production from the Assets was
approximately 5,000 Boe/d (36% liquids), and accordingly, Paramount
is revising its 2018 production guidance to be approximately 90,000
Boe/d (~ 37% liquids). The Company's capital allocation for
the Assets for the balance of the year was nominal and, as a
result, Paramount's 2018 capital budget is unchanged at
$600 million.
ABOUT PARAMOUNT
Paramount is an independent, publicly traded, liquids-focused
Canadian energy company that explores for and develops both
conventional and unconventional petroleum and natural gas
resources, including long-term strategic exploration and
pre-development plays, and holds a portfolio of investments in
other entities. The Company's principal properties are located in
Alberta and British Columbia. Paramount's Class A common
shares are listed on the Toronto Stock Exchange under the symbol
"POU".
ADVISORIES
Forward Looking Information
Certain statements in this news release constitute
forward-looking information under applicable securities
legislation. Forward-looking information typically contains
statements suggesting future outcomes or an outlook.
Forward-looking information in this news release includes, but is
not limited to, Paramount's projected production and capital
expenditure budget. The forward-looking information in this news
release is based on a number of assumptions which may prove to be
incorrect. The forward-looking information in this news
release is also based on expectations, estimates and projections
that involve a number of risks and uncertainties which could cause
actual results to differ materially from those anticipated by
Paramount and described in the forward-looking information. See the
sections titled "Note Regarding Forward Looking Statements and
Advisories" and "Risk Factors" in Paramount's current annual
information form for a description of the assumptions and risks
applicable to Paramount's business and the forward-looking
information herein. The forward-looking information contained
in this news release is made as of the date hereof and, except as
required by applicable securities law, Paramount undertakes no
obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise.
Oil and Gas Measures
This news release contains disclosures expressed in
"Boe/d". Natural gas equivalency volumes have been derived
using the ratio of six thousand cubic feet of natural gas to one
barrel of oil. Equivalency measures may be misleading, particularly
if used in isolation. A conversion ratio of six thousand cubic feet
of natural gas to one barrel of oil is based on an energy
equivalency conversion method primarily applicable at the burner
tip and does not represent a value equivalency at the well
head. During the three months ended March 31, 2018, the value ratio between crude oil
and natural gas was approximately 40:1. This value ratio is
significantly different from the energy equivalency ratio of 6:1.
Using a 6:1 ratio would be misleading as an indication of
value.
SOURCE Paramount Resources Ltd.