Storm Resources said late Wednesday that it has has entered into a purchase and sale agreement in relation to the disposition of a field that can produce around 275 barrels of oil equivalent (boe) per day for $18 million (CAD18 million).
The asset contains an estimated 1,140 million barrels of oil equivalent (mboe) of proved plus probable reserves based on an independent report dated Mar.31, 2012, prepared by InSite Petroleum Consultants.
In addition, on Jan.18, Storm closed the sale of a minor property producing 30 boe per day for $2.1 million (CAD2.1 million).
Total proceeds of $20.1 million (CAD20.1 million) from these two dispositions will initially be used to reduce Storm's bank debt. At Dec. 31, 2012, Storm's adjusted net debt, which includes working capital deficiency, is forecast to be $40 million (CAD40 million). This amount includes the value of Storm's public company investments. Giving pro forma effect to the dispositions above, adjusted net debt at Dec. 31, 2012 would approximate $20 million (CAD20 million). Storm's bank credit facility is expected to be reduced from $62 million (CAD62 million) to $52 million (CAD52 million) as a consequence of these dispositions.
Both of the oil fields are in the Grande Prairie area of northwest Alberta.
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