Daylight Energy Finalizes Sale of Assets in Eastern Alberta
Daylight Energy has completed the previously announced sale of certain non-core heavy oil and natural gas assets in Eastern Alberta to Gear Energy for aggregate consideration of $125 million, consisting of $100 million in cash and $25 million in equity. Gear Energy Ltd. is a private Calgary-based oil and gas company led by Don Gray (Executive Chairman) and Rick Braund (Director), previously co-founders of Peyto Energy Trust, and Ingram Gillmore (President & CEO) former VP Engineering at ARC Energy Trust. After application of the cash proceeds from this sale, Daylight will have approximately $300 million drawn against its credit facility.
Field estimates during Q2 2010 indicate that Daylight achieved record production of 42,250 boe per day during the quarter, an increase of approximately 6% over Q1 2010 volumes. This increase includes the production volumes associated with the acquisition of West Energy effective May 12, 2010 and the impact of our successful capital program through the first half of 2010. In spite of unusually wet conditions in Daylight's key Pembina property, the Corporation is pleased to announce that drilling and completion operations are now underway at four locations for light oil horizontal multi-stage frac wells. Daylight is continuing to actively pursue our Pembina Cardium light oil development with production from our initial 9 (8.4 net) Cardium wells drilled during 2010 continuing to exceed expectations at over 1,700 boe per day for Q2 2010. Daylight anticipates releasing our full Q2 2010 financial and operating results after close of trading on Tuesday, August 3, 2010.
Daylight is revising our production guidance to 42,000 to 43,000 boe per day for 2010, with an exit rate of approximately 45,000 boe per day to reflect the closing of the non-core asset sale. It is anticipated that Daylight's leverage to oil and natural gas liquids will be approximately 45% for the remainder of 2010.