Mr. M. Scott Ratushny reports
MIDWAY RELEASES CORPORATE UPDATE AND YEAR END 2011 RESULTS
Midway Energy Ltd. has released its corporate update, and financial and operating results for the year ended Dec. 31, 2011.
Corporate update
In February, 2012, Midway closed a private placement of six million units of the company at a price of $3.50 per unit for total gross proceeds of $21-million. Each unit consisted of one common share and one-half of a warrant with each full warrant enabling the subscriber to purchase one common share of Midway at $4 for one year from the date of closing.
After completing its review of Midway's reserves, the company's lending syndicate increased Midway's credit facilities to $140-million.
On Feb. 27, 2012, Midway entered into an arrangement agreement with Whitecap Resources Inc., whereby Whitecap will acquire all of the issued and outstanding common shares of Midway. Pursuant to the transaction, Midway shareholders will, subject to proration, receive, at the election or deemed election of the holder: (i) 0.4802 of a common share of Whitecap for each Midway common share held; (ii) $4.85 in cash for each Midway common share held; or (iii) a combination thereof for their Midway common shares, subject to a maximum of approximately $111.2-million in cash and 33.5 million Whitecap common shares. If the total amount of cash consideration or the total number of Whitecap common shares elected exceeds the maximum cash consideration or the maximum share consideration, respectively, then the cash consideration paid or the number of Whitecap common shares issued to any Midway shareholder will be subject to prorationing. Midway also announces it has entered into an amended and restated arrangement agreement dated as of March 20, 2012, with Whitecap, to amend the treatment of the warrants issued in February, 2012, under the transaction. As a result of the amendment, instead of a cash buyout, upon completion of the transaction, the warrants will become obligations of Whitecap and each warrant will entitle the holder to acquire 0.4802 of a Whitecap common share at a price of approximately $8.33 per share. The transaction includes a reciprocal non-completion fee of $27.5-million, subject to certain conditions.
Management believes that this transaction is in the best interest of shareholders as the combined entity will be able to fully develop the company's assets at Garrington through increased drilling density and enhanced oil recovery techniques, which are complementary to Whitecap's existing horizontal drilling operations in the Pembina Cardium play. As a significant portion of the transaction comprises Whitecap common shares, shareholders will be able to participate in the future growth of the combined entity with strong growth potential from a diverse portfolio of oil-weighted properties.
A joint management information circular and proxy statement outlining the details of the transaction will be mailed shortly to the holders of Midway common shares for a meeting to be held at 9:30 a.m. (Calgary time) on Friday, April 20, 2012, in the grand lecture theatre of the Metropolitan Conference Centre, 333 4th Ave. SW, Calgary. At the meeting, holders of Midway common shares will be permitted to vote on the transaction. The transaction is anticipated to close on or about April 20, 2012.
CORPORATE HIGHLIGHTS
(in thousands of dollars, except operational
and per share amounts)
Q4 Q4 Year Year
2011 2010 2011 2010
Petroleum and
natural gas revenue $27,679 $15,193 $95,559 $39,627
------- ------- ------- -------
Funds from
operations 16,615 8,637 58,091 20,260
Basic per share $ 0.21 $ 0.13 $ 0.76 $ 0.31
Diluted per share 0.20 0.12 0.73 0.30
------- ------- ------- -------
Net earnings (loss) $ 761 $ (71) $14,452 $(1,012)
======= ======= ======= =======
Basic per share $ 0.01 $ (0.00) $ 0.18 $ (0.02)
Diluted per share 0.01 (0.00) 0.17 (0.02)
------- ------- ------- -------
Average production
Oil and NGLs
(bbl/d) 3,101 1,881 2,707 1,184
Natural gas (mcf/d) 7,411 6,585 7,456 5,641
Oil equivalent
(boe/d 6:1) 4,336 2,978 3,950 2,124
Average realized
prices:
Oil and NGLs
($/bbl) $ 88.72 $ 73.95 $ 86.09 $ 71.40
Natural gas ($/mcf) $ 3.44 $ 3.92 $ 3.82 $ 4.21
Oil equivalent
(boe/d 6:1) $ 69.34 $ 55.37 $ 66.22 $ 50.98
Netback ($/boe)
Petroleum and
natural gas sales $ 69.34 $ 55.37 $ 66.22 $ 50.98
Royalties 6.64 5.30 7.31 5.03
Operating expenses 14.24 12.46 12.89 13.13
Operating netback 48.46 37.61 46.02 32.82
We seek Safe Harbor.