Twin Butte Energy Completes Strategic Asset Disposition
Twin Butte has completed a disposition of assets in North East British Columbia for $9.9 million, including closing adjustments. Proceeds from the sale will reduce Twin Butte's net debt position which post transaction is expected to be approximately $40 million at the end of Q2. The sale will not affect the Company's existing bank line as only minimal reserves and approximately 35 boe/d of production were associated with the assets. The disposition included 1,847 net undeveloped acres of land. Twin Butte's bank lines are $65 million leaving approximately $25 million of excess availability providing substantial financial flexibility to pursue asset or corporate acquisition opportunities.
The asset disposition is one of a number of strategic moves the new management team at Twin Butte has, and will continue to make, to improve overall corporate strength and efficiency. These actions ensure that Twin Butte is positioned to take advantage of the future growth potential of our considerable undeveloped land and reserve base.
Twin Butte's new management team continues to refocus the company in core areas that have the potential to be significant growth platforms. The migration to more repeatable play types, predominantly in North East British Columbia and North West Alberta is ongoing. Twin Butte's inventory of oil and gas opportunities currently exceeds 100 locations or $200 million of potential capital activity.
A significant portion of the Company's inventory is oil based, which provides compelling economics particularly with current Alberta royalty incentives and strengthened pricing. The Company has a number of large Original Oil in Place, low decline properties at Jayar and Provost as well as resource style Viking and Gething gas plays, all of which are horizontal and/or multistage fracture stimulation candidates. These properties and opportunities provide substantial depth to Twin Butte's inventory ensuring long term production and reserve growth potential.
Twin Butte has the operational and financial flexibility to re-allocate capital between its numerous drill ready opportunities, or to asset or corporate acquisition opportunities. Twin Butte is a value oriented junior producer with expanding operations in North East British Columbia and North West Alberta. With a stable low decline production base, the Company is well positioned to maintain production levels during periods of low capital spending and to grow as commodity prices strengthen. The Company remains focused and committed to growth in 2009 through value added corporate consolidation thereby enhancing the long term potential growth profile for our shareholders.