CALGARY, AB, June 17, 2021 /CNW/ - Paramount Resources
Ltd. ("Paramount" or the "Company") (TSX: POU) is pleased to
announce the implementation of a monthly dividend program with
respect to its class A common shares (the "Common Shares").
The Board of Directors has declared an inaugural cash dividend of
$0.02 per Common Share that will be
payable on July 30, 2021 to
shareholders of record on July 15,
2021. The dividend will be designated as an "eligible
dividend" for Canadian income tax purposes. While the
Company continues to prioritize the allocation of free cash flow to
debt reduction, Paramount's strong financial outlook and operating
results have enabled the implementation of the monthly dividend
program to further augment shareholder returns.
Paramount has received a cash payment of $67 million from Strathcona Resources Ltd.
("Strathcona") in settlement of its previously disclosed dissent
proceedings respecting Strath Resources Ltd. and for the sale of
its remaining securities in Strathcona. The proceeds have
been applied to reduce indebtedness under the Company's senior
secured revolving bank credit facility (the "Credit
Facility"). The Credit Facility has been amended to extend
the maturity date to June 2, 2024 and
change its size to $900 million, with
an accordion feature providing flexibility to increase the size to
$1.0 billion, subject to incremental
lender commitments. Approximately $635
million was drawn on the Credit Facility following
application of the proceeds from Strathcona. Indebtedness
under the Credit Facility will be further reduced upon closing of
the previously announced Birch disposition in July.
The Toronto Stock Exchange (the "TSX") has accepted the
Company's notice to implement a normal course issuer bid ("NCIB")
for its Common Shares. Paramount may purchase up to 7,308,743
Common Shares under the NCIB, representing 10% of the public float
of 73,087,431 Common Shares as of June
16, 2021. The NCIB provides the Company with the
flexibility to increase shareholder returns through the repurchase
of Common Shares at times when management believes that the market
price of the Common Shares does not reflect their underlying
value. The actual number of Common Shares that will be
purchased under the NCIB and the timing of any such purchases will
be subject to market conditions and Paramount's disciplined free
cash flow allocation priorities, including debt reduction.
The previous NCIB of the Company, under which the Company was
authorized to purchase a maximum of 7,044,289 Common Shares,
expired on January 5, 2021 with no
Common Shares having been purchased thereunder.
The NCIB will commence on June 30,
2021 and is due to expire on June
29, 2022. Any purchases of Common Shares under the
NCIB will be made through the facilities of the TSX or alternative
Canadian trading systems at the market price at the time of
purchase. Under TSX rules, a maximum of 100,195 Common Shares may
be purchased under the NCIB in any one day, representing 25% of the
average daily trading volume of the Common Shares on the TSX for
the six months ended May 31, 2021 of
400,780 Common Shares. Paramount may also make one block
purchase per calendar week which exceeds the daily purchase
restriction, subject to the rules of the TSX.
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 reserves
and resources, including longer-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".
Forward-Looking Information
This press release contains forward-looking information under
applicable securities legislation concerning: (i) the closing of
the Birch disposition and the timing thereof and (ii) the payment
of future dividends under the Company's monthly dividend
program. Although Paramount believes that the expectations
reflected in such forward-looking information are
reasonable based on the information available at the time of
this press release, undue reliance should not be placed on the
forward-looking information as Paramount can give no assurance that
such expectations will prove to be correct. Such
forward-looking information is based on a number of assumptions
which may prove to be incorrect. In the case of the closing
of the Birch disposition and the timing thereof, these include
assumptions as to the satisfaction of the conditions to closing of
the Birch disposition. In the case of the payment of future
dividends under the Company's monthly dividend program, these
include assumptions as to the Company's future free cash flow,
operating results, capital requirements and financial
position. There is a risk that the conditions to closing of
the Birch disposition are not satisfied and there are no assurances
that the Birch disposition will close at the anticipated time or at
all. There are risks that may result in the Company changing,
suspending or discontinuing its monthly dividend program, including
changes to free cash flow, operating results, capital requirements,
financial position, market conditions or corporate strategy and the
need to comply with requirements under debt agreements and
applicable laws respecting the declaration and payment of
dividends. There are no assurances as to the continuing
declaration and payment of future dividends under the Company's
monthly dividend program or the amount or timing of any such
dividends. For more information relating to risks, see
"Risk Factors" in Paramount's annual information form
for the year ended December 31, 2020,
which is available on SEDAR at www.sedar.com.
The forward-looking information contained in this press 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.
SOURCE Paramount Resources Ltd.