From the Wires
Avatar Energy Ltd. Announces Third Quarter 2012 Financial Results, Provides Corporate Update and Enters Into Extension and Forbearance Agreements
By: Marketwired .
Nov. 29, 2012 05:35 PM
CALGARY, ALBERTA -- (Marketwire) -- 11/29/12 -- Avatar Energy Ltd. ("Avatar" or the "Corporation") (TSX VENTURE:AVG) is pleased to announce its third quarter 2012 financial results. Copies of the financial statements and management discussion and analysis are available for review at www.sedar.com and on our website at www.avatarenergy.ca.
Third Quarter 2012 Highlights
-- Stable production of 66 barrels of oil equivalent ("BOE") per day from operations. -- Successful collection of $114,000 bad debt.
Avatar also announces that it has entered into a loan extension and amending agreement ("Extension Agreement") with its lender. The Extension Agreement, among other things, extends the maturity date of Avatar's credit facility to December 17, 2012 (subject to any extension granted by the lender) for the purpose of providing the Corporation with sufficient time to conclude the sale of its working interest in properties located in the Pembina Strawberry Creek area for cash gross proceeds of $3.12 million (the "Transaction"). The net proceeds from the Transaction will be used to repay all indebtedness owing under the credit facility, satisfy other liabilities and for general corporate purposes.
On a post-Transaction basis, Avatar will continue to be listed on the TSXV and will focus on its Pembina Brazeau properties while exploring other opportunities in the Pembina Cardium light oil play that have long life high quality reserves with repeatable drilling upside.
Avatar also announces that it has entered into a forbearance agreement (the "Forbearance Agreement") with a partner of its Brazeau well. The Forbearance Agreement provides that the partner will forebear from pursuing judgment against Avatar until February 15, 2013 with respect to a statement of claim filed against it by the partner for $664,159.20 (plus costs and interest). The amounts claimed by the partner are reflected as trade payables in Avatar's most recent financial statements.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements. More particularly, this press release contains statements concerning the completion of the Transaction and the amount and use of proceeds therefrom. Although the Corporation believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The risks to which the Corporation is subject include, but are not limited to, operational risks inherent in the exploration, development and production of oil and gas; availability of financing; general economic conditions and changes in the capital markets; volatility of oil and gas prices; competition; changes in legislation and the regulatory environment; and uncertainties involved in completion of the Transaction, such as the satisfaction of any closing conditions any obtaining any approvals that may be required from the TSXV. The forward looking statements contained in this press release are made as of the date hereof and the Corporation undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless 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.
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