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Kelt Exploration Ltd
Symbol KEL
Shares Issued 187,793,857
Close 2020-04-23 C$ 1.24
Recent Sedar Documents

Kelt Exploration shareholders approve AGM resolutions

2020-04-23 17:46 ET - News Release

Mr. David Wilson reports

KELT ANNOUNCES RESULTS OF SHAREHOLDERS' MEETING AND PROVIDES CORPORATE UPDATE

All matters presented for approval at the annual meeting of Kelt Exploration Ltd. shareholders held on April 22, 2020, have been fully authorized and approved. A total of 114,994,030 common shares, representing 61.23 per cent of the common shares issued and outstanding, were represented in person or by proxy at the meeting. Brief descriptions of the matters voted upon and the outcome of the votes are set forth in this news release.

Fixing number of directors

By vote by way of a show of hands, an ordinary resolution to approve fixing the number of directors to be elected at the meeting at six was approved.

Election of directors

All of the nominees proposed as directors of the company were duly elected as directors of the company, with votes cast by the shareholders present in person or represented by proxy at the meeting by way of a ballot, as shown in the attached table.

                       Outcome of the vote        Votes for      %    Withheld      %  
                                                                      
Robert J. Dales                    Elected      109,006,635  95.95   4,598,629   4.05
Geraldine L. Greenall              Elected      113,228,909  99.67     376,355   0.33
William C. Guinan                  Elected      111,373,747  98.04   2,231,517   1.96
Michael R. Shea                    Elected      105,828,797  93.15   7,776,467   6.85
Neil G. Sinclair                   Elected      109,009,635  95.95   4,595,629   4.05
David J. Wilson                    Elected      113,578,220  99.98      27,044   0.02

Appointment of auditor

By vote by way of a show of hands, an ordinary resolution to approve the appointment of PricewaterhouseCoopers LLP as the auditor of the company was approved.

Corporate update

Kelt is providing a corporate update in response to the current market conditions resulting from the COVID-19 pandemic and decreased commodity prices.

Kelt's highest priority remains the health and safety of its employees, partners and the communities where it operates. The company has introduced measures to protect the well-being of these stakeholders and is proud of the dedication of its work force to maintain safe operations and business continuity in a challenging environment.

The unprecedented impact to global oil demand destruction, resulting from the COVID-19 pandemic as well as excess oil supplies as many oil producing nations sought to gain global market share, has resulted in a collapse in crude oil prices around the world. Many regions around the world may be facing the prospect of negative oil prices in the near term as access to physical storage facilities becomes unavailable.

Further to previously announced capital expenditure reductions and cost-cutting measures, Kelt continues to preserve shareholder value in the following manner:

  • In addition to the company's existing hedge book, Kelt has entered into new hedge contracts by fixing the sales price of Edmonton MSW (Mixed Sweet Blend) light oil for the six-month period from July 1, 2020, to Dec. 31, 2020, on 3,000 barrels per day at an average fixed price of $31.36 (Canadian) per barrel (the implied underlying indices were $33.40 (U.S.) per barrel for WTI (West Texas Intermediate) oil, $11 (U.S.) per barrel for the WTI-MSW differential and $1.40 (Canadian) for the Canadian-dollar/U.S.-dollar exchange rate).
  • Kelt is taking measures to reduce production levels to protect against selling oil at negative margins and to preserve value.
  • Kelt expects to apply for the federal government's Canada emergency wage subsidy (CEWS), whereby, as a Canadian employer, the business of which has been affected by COVID-19, the company would be eligible for a subsidy of 75 per cent of employee wages (up to a maximum of $847 per employee per week) for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020.
  • Kelt has obtained approval from its lenders to extend the revolving period under its credit facility agreement from April 30, 2020, to May 31, 2020, with respect to determining the borrowing base available under its revolving borrowing base line.
  • Kelt expects to pursue additional opportunities to access credit support during this uncertain economic environment created by the COVID-19 crisis that is being offered by the government of Canada, though the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) as announced by the government on April 17, 2020.

As a result of the significant continuing uncertainty in market conditions, Kelt is withdrawing its 2020 corporate guidance previously provided in the company's news release on March 17, 2020, and in its management's discussion and analysis for the year ended Dec. 31, 2019, dated March 9, 2020. In this regard, the company currently has no immediate plans to start up drilling and completion operations on wells that currently remain in the capital expenditure budget until there is better clarity on future commodity prices, which have been negatively impacted by global oil demand destruction as a result of the COVID-19 pandemic.

Kelt will continue to reassess its ability to reasonably estimate and provide annual guidance and plans to continue to provide corporate updates during this period of heightened volatility and uncertainty.

About Kelt Exploration Ltd.

Kelt is an oil and gas company based in Calgary, Alta., focused on the exploration, development and production of crude oil and natural gas resources in Western Canada.

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