Toscana Energy Will Not Proceed With the Acquisition of Oil Assets, Will Decrease Its Monthly Dividend and Confirms January Dividend
CALGARY, Alberta, Jan. 12, 2016 (GLOBE NEWSWIRE) -- Toscana Energy Income Corporation ("Toscana Energy" or the "Company") (TSX:TEI) announces that it will not proceed with the previously disclosed acquisition of assets that produce 300 barrels a day of light oil production, for $15,000,000 in cash, as outlined in the press release dated November 25, 2015. The significant erosion in energy prices coupled with very soft debt and financial markets are the main drivers in the decision.
In addition, due to the current commodity price environment and as a further measure to protect the integrity of the balance sheet and to protect the Company’s financial flexibility, the Company has changed its dividend policy to reduce its monthly dividend from $0.10 per common share of the Company ("Common Share") to $0.05 per Common Share (or the equivalent of $0.30 per Common Share to $0.15 per Common Share on a quarterly basis), a decrease of 50%. A cash dividend of $0.05 per Common Share will be paid on February 16, 2016 in respect of January 2016 production of the Company for shareholders of record on January 29, 2016. The ex-dividend date is January 27, 2016. This dividend is an eligible dividend for purposes of the Income Tax Act (Canada). The declaration of dividends is determined on a monthly basis by the board of directors of the Company and is based on the sustainability of cash flows and earnings in the future. The board of directors continues to monitor operations closely and will take further action if needed to protect the Company’s financial position.
This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. Forward‐looking statements and information are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions.
More particularly and without limitation, this news release contains forward‐looking statements and information concerning the Company's expectations on the sustainability and its ability to pay the revised dividend. The forward-looking statements and information are based on certain key expectations and assumptions made by management of the Company, including, among other things: expectations regarding future commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future production rates; reserve volumes; performance of existing and future wells; the impact of competition; and overall business strategy. Although management of Toscana Energy believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.
Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to reserves, production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions and failure to realize the anticipated benefits of acquisitions; ability to access sufficient capital from internal and external sources; failure to obtain required regulatory and other approvals and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Accordingly, readers should not place undue reliance on the forward-looking statements, timelines and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive.
The forward-looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws or the Toronto Stock Exchange. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.
About Toscana Energy Income Corporation
Toscana Energy is a conventional oil and gas producer with the mandate to acquire high quality, long life oil and gas assets including royalties, non-operated working interests and unitized production for yield and capital appreciation. Toscana Energy is managed by Sprott Toscana through Toscana Energy Corporation. Sprott Toscana is a member of the Sprott Group of Companies.
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