Triton Energy Corp.

TSX VENTURE: TEZ
Triton Energy Corp.
Jan 28, 2010 16:38 ET.

CALGARY, ALBERTA–(Marketwire – Jan. 28, 2010) – Triton Energy Corp. (“Triton” or the “Corporation“) (TSX VENTURE:TEZ) is pleased to announce that it has entered into an agreement to acquire oil & gas properties located in West Central Alberta for approximately $45.0 million (the “Acquisition“). Additionally, Triton is also pleased to announce a $25.0 million bought deal financing at a price of $0.24 per share (the “Financing“).

HIGHLIGHTS OF THE ACQUISITON

The acquired properties (65% liquids rich natural gas, 35% light oil) are located in the Ferrybank area of West Central Alberta and will increase Triton’s inventory of high quality repeatable drilling prospects. The Acquisition will increase Triton’s exposure to the liquids rich natural gas Glauconite Formation on the Hoadley trend, an area where industry players have experienced considerable success with horizontal drilling, and it will also provide Triton multiple Ellerslie and Belly River light oil drilling locations. The Acquisition is also generally characterized by high working interests (~70%), operatorship, 2D & 3D seismic coverage and control of infrastructure, all attributes that provide Triton with significant exposure to the benefits and upside of these plays. These properties also contain gathering and processing infrastructure capable of accommodating future production additions.

The effective date of the Acquisition is November 1, 2009 and it is expected to close on or about February 22, 2010.

TRANSACTION METRICS & CHARACTERISTICS

The Acquisition is expected to be accretive to Triton on a per share basis on all key metrics. Transaction metrics set out below are net of an internally estimated land value of $2.0 million (~ $100/acre) and net of approximately $2.0 million of cash flow since the November 1, 2009 effective date. The Acquisition has the following metrics and characteristics:

Acquisition Metrics
Current Production 1,126 boe/d  (65% natural gas, 35% oil & ngls)
Production Per Flowing boe $36,412 per producing boe
Proved Reserves $15.43 per boe
Proven and Probable Reserves $10.48 per boe
Characteristics
Total Proved Reserves(1) 2,658 Mboe
Total Proved plus Probable Reserves(1) 3,912 Mboe
Proved plus Probable RLI 9.5 years
Undeveloped Land 24,038 net acres
Development Drilling Locations(2)
Glauconite (natural gas) Hz Drilling Locations 12 wells
Ellerslie & Belly River (oil) Drilling Locations 13 wells
Recompletions(2) 11 wells, mixed zones
1. The company interest reserves estimates from GLJ Petroleum Consultants (“GLJ”) only include producing assets and the Glauconite drilling plans for the Crystal area. Proved undeveloped reserves are assigned to three proved horizontal locations and three proved vertical locations. Proved plus probable reserves are assigned to four horizontal locations and five vertical locations. GLJ is expected to complete the NI 51-101 evaluation of the PDNP and additional PUD and Probable reserves in conjunction with Triton’s year-end reporting.
2. Development drilling locations and recompletions are internally generated and may not necessarily be reflected in the GLJ report.

EQUITY FINANCING

Triton has also entered into an agreement with a syndicate of underwriters, led by National Bank Financial Inc. and including First Energy Capital Corp., Macquarie Capital Markets Canada Ltd., Desjardins Securities Inc. and Raymond James Ltd. (collectively, the “Underwriters“), pursuant to which the Underwriters will purchase, on a bought deal basis, 104,170,000 common shares (“Common Shares“) of Triton at a price of $0.24 per common share for gross proceeds of $25.0 million. In addition, the Underwriters have been granted an over-allotment option (the “Over-Allotment Option“), exercisable for a period of 30 days following closing of the Financing, to purchase a further 15,625,000 common shares, at a price of $0.24 per common share for additional gross proceeds of $3.75 million.

The net proceeds of the Financing will be used to fund the Acquisition, ongoing exploration and development activities and for general corporate purposes. The Common Shares issued under the Financing will be offered in certain provinces of Canada by way of a short form prospectus. Closing of the Financing is expected to occur on or about February 22, 2010, subject to customary conditions and regulatory approvals, including the approval of the TSX Venture Exchange (the “TSXV“).

In connection with the Acquisition, the Corporation expects to increase its credit facilities to approximately $20 million effective at closing of the Financing. Triton estimates it will have debt, net of working capital, of approximately $15 million at the closing of the Financing and the Acquisition, closing of the previously announced rights offering and assuming the Over-Allotment Option is exercised in full.

STRATEGIC RATIONALE

Triton’s management team is focused on creating shareholder value through both internal generation of prospects and strategic acquisitions. The Acquisition is consistent with Triton’s strategy of acquiring high quality liquids rich natural gas, complemented by light oil, with repeatable drilling opportunities. The Acquisition will also provide Triton with a solid foundation for growth by enhancing its current operations with a multi-year drilling inventory in an area where the management team has extensive experience and success. With the addition of these properties, the management team will be able to exploit its technical expertise, capitalize on its experience and provide value for its shareholders by implementing an aggressive exploration and development program.

Upon completion of the Acquisition, the Corporation expects to have pro forma production of approximately 1,950 boepd of natural gas and light oil, more than 62,300 net acres of undeveloped land and a concentrated asset base in West Central Alberta with a large inventory of development and exploratory drilling locations. The Corporation expects to announce its 2010 capital program when the Acquisition closes.

FINANCIAL ADVISOR

National Bank Financial Inc. is acting as exclusive financial advisor to Triton Energy Corp. with respect to the Acquisition.

INVESTOR INFORMATION

Triton is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation’s common shares are listed on the TSX Venture Exchange under the trading symbol “TEZ”.

Additional information regarding Triton is available under the Corporation’s profile at www.sedar.com and an updated presentation is available at the website www.tritonenergy.ca.

This press release shall not constitute an offer to sell, nor the solicitation of an offer to buy, any securities in the United States, nor shall there be any sale of securities mentioned in this press release in any state in the United States in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

Forward Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation’s plans and other aspects of the Corporation’s anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management’s assessment of future plans and operations, and, more particularly, statements concerning the completion of the Acquisition and the Financing and the use of proceeds of the Financing.

Forward-looking statements typically use words such as “will,” “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,” “project,” “should,” “plan,,” “intend,” and similar expressions suggesting future outcomes, and statements that actions, events or conditions “may,” “would,” “could,” or “will” be taken or occur in the future. Specifically, this press release contains forward-looking statements relating to the completion of the Acquisition and the Financing; the expected transaction metrics of the Acquisition; the use of proceeds of the Financing; the expected increase in the Corporation’s credit facility as a result of the Acquisition and the Financing; the Corporation’s anticipated debt following completing of the Acquisition and the Financing; and anticipated growth and advantages to be gained as a result of the Acquisition. In addition, statements regarding reserves are deemed to be forward-looking statements, as they involve estimates and assumptions as to the expectation that the reserves can be economically exploited in the future. The forward-looking statements are based on various assumptions including expectations regarding the properties acquired further to the Acquisition; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals and the satisfaction of closing conditions of the Acquisition and the Financing; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; future exchange and interest rates; the Corporation’s ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital.. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Triton believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Triton does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent (“boe”) may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For more information, please contact

Triton Energy Corp.
Ernest G. Sapieha
President & CEO
(403) 532-0022
Fax: (403) 532-3993
esapieha@tritonenergy.ca
or
Triton Energy Corp.
Dean J. Schultz
VP Finance & CFO
(403) 532-0022
Fax: (403) 532-3993
dschultz@tritonenergy.ca
or
Triton Energy Corp.
Murray Stodalka
EVP Engineering & Operations
(403) 532-0022
Fax: (403) 532-3993
mstodalka@tritonenergy.ca
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Triton Energy Corp. Announces West Central Alberta Property Acquisition and $25 Million Bought Deal Financing

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