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Pine Cliff Enters Into Agreement to Acquire Carrot Creek Oil & Gas Assets

Feb 10, 2012 - 07:00 AM ET

CALGARY, ALBERTA--(Marketwire - Feb. 10, 2012) - Pine Cliff Energy Ltd. ("Pine Cliff") (www.pinecliffenergy.com) (TSX VENTURE:PNE) is pleased to announce that it has entered into an arm's length agreement (the "Purchase Agreement") to acquire (the "Acquisition") certain oil and natural gas assets in the Carrot Creek area in the Province of Alberta (the "Carrot Creek Assets") for cash consideration of $23.5 million. The Acquisition is subject to standard industry closing conditions, including due diligence, title review and regulatory and stock exchange approval, and has an effective date of January 1, 2012. In addition, the Acquisition is conditional upon the vendor of the Carrot Creek Assets completing its acquisition of the Carrot Creek Assets from a third party, which acquisition is expected to close concurrently with the closing of this Acquisition. Subject to the satisfaction or waiver of all conditions set forth in the Purchase Agreement, it is currently anticipated that the closing of the Acquisition will occur on or about March 1, 2012. The cash consideration to be paid by Pine Cliff under the Purchase Agreement is expected to be financed by a combination of working capital, equity and debt, details of which will be subsequently announced in a future press release.

The Carrot Creek Assets have current estimated production of 950 BOE per day, of which approximately 23 percent consists of oil and natural gas liquids and 77 percent natural gas. In addition to the producing assets, Pine Cliff will also acquire 15.3 net sections of prospective land some of which has current vertical production. Pine Cliff anticipates that this land has multi-zone potential which can be further exploited using horizontal drilling technology. Pine Cliff has also negotiated preferential pricing for processing a portion of its natural gas and liquids production at a gas plant owned and operated by the vendor of the Carrot Creek Assets.

An independent reserve evaluation was prepared by McDaniel & Associates Consultants Ltd. ("McDaniel") effective January 1, 2012 (the "McDaniel Report") in respect of the Carrot Creek Assets. The McDaniel Report was prepared in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. In the McDaniel Report, McDaniel assigned 2.0 million BOE of remaining total proved reserves and 3.1 million BOE of remaining total proved plus probable reserves to the Carrot Creek Assets. Based on the proved developed producing forecast in the McDaniel Report, 2012 average royalties are 22 percent and 2012 production expenses are $7.38 per BOE. Pine Cliff will provide additional details regarding the Carrot Creek Assets and associated reserves data in a subsequent press release.

Trading Halt

Pursuant to the policies of the TSX Venture Exchange (the "Exchange"), the Acquisition is a "fundamental acquisition" and accordingly, pursuant to such policies, the common shares of Pine Cliff will be halted from trading on the Exchange pending receipt and review by the Exchange of acceptable documentation regarding the Acquisition.
For Further Information:

Further information relating to Pine Cliff may be found on www.sedar.com as well as on Pine Cliff's website at www.pinecliffenergy.com.

Advisory

This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States, absent U.S. registration or an applicable exemption therefrom, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities law of such state. The Pine Cliff common shares will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, a U.S. person, absent registration or an applicable exemption therefrom.

Reserve Disclosure

There are numerous uncertainties inherent in estimating quantities of reserves. The reserve information set out in this press release are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual reserves may be greater than or less than the estimates provided herein.

Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. There is a 90 percent probability that the quantities actually recovered will equal or exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. There is a 50 percent probability that the quantities actually recovered will equal or exceed the estimated proved plus probable reserves.

Barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6Mcf:1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Special Note Regarding Forward-Looking Information

This press release contains certain statements or disclosures relating to Pine Cliff that are based on the expectations of Pine Cliff as well as assumptions made by and information currently available to Pine Cliff which may constitute forward-looking information under applicable securities laws. All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Pine Cliff anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. In particular, this press release makes reference to the timing and completion of the expected completion of the Acquisition, including the ability of Pine Cliff to satisfy all necessary conditions to the closing of the Acquisition, the anticipated benefits of the Acquisition, crude oil reserve and resource volumes associated with the properties to by acquired, expected production from the properties to be acquired pursuant to the Acquisition and timing of exploration and production activities. Readers are cautioned that there is no assurance that the transactions referenced herein will proceed. Certain conditions must be met before the Acquisition can be completed. Such conditions include the receipt of all necessary regulatory approvals, including the approval of the Exchange.

There is no assurance that the required approvals will be received and there is therefore no assurance that the Acquisition will be completed in the time frame anticipated or at all. Many factors could cause the performance or achievement by Pine Cliff to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include the failure to obtain the required approvals, including the approval of the TSX Venture Exchange. Readers are cautioned that the foregoing list of factors is not exhaustive. Statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. Pine Cliff is not under any duty to update any of the forward-looking statements after the date of this press release or to conform such statements to actual results or to changes in Pine Cliff's expectations and Pine Cliff disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

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 FURTHER INFORMATION PLEASE CONTACT:

Pine Cliff Energy Ltd.
Phil Hodge
President and CEO
(403) 269-2289
(403) 265-7488 (FAX)
info@pinecliffenergy.com
www.pinecliffenergy.com