From: Newsfile Corp.
Calgary, Alberta--(Newsfile Corp. - June 15, 2023) - Criterium Energy Ltd. (TSXV: CEQ) ("Criterium" or the "Company"), an independent upstream energy development and production company focused in Southeast Asia, is pleased to announce that it has executed a sale and purchase agreement ("SPA") on June 14, 2023 to acquire all the issued and outstanding shares of Mont D'Or Petroleum Limited ("MOPL") (the "Acquisition"). MOPL holds 100% operating working interests in two Production Sharing Contracts ("PSC") in Indonesia, the Tungkal PSC located onshore South Sumatra which produces 1,030 bbl/d and contains 2P Reserves of 4.6 MMbbl and the West Salawati PSC located in Southwest Papua that produces 20 bbl/d and contains 2P Reserves of 0.1 MMbbl1. Collectively, Tungkal and West Salawati have been independently valued at US$58 million NPV101 after tax.
This transformative acquisition will establish Criterium as an operator in Southeast Asia while providing immediate production and operating cash flow. The Acquisition is aligned with Criterium's strategy of building a balanced portfolio of low-risk producing assets with tangible reinvestment opportunities in the form of production optimization, infill drilling, and step-out developments.
The Company is also pleased to announce that it has filed and been receipted for a preliminary short-form prospectus in connection with a marketed agency equity public offering (the "Offering") of subscription receipts of the Company (the "Subscription Receipts") at a price per Subscription Receipt to be determined in the context of the market, for aggregate gross proceeds of up to $22 million (US$16 million equivalent). The Offering is being led by Research Capital Corporation, as lead agent and sole bookrunner (the "Lead Agent"), on behalf of a syndicate of agents, including Canaccord Genuity Corp. and Stifel FirstEnergy (collectively, the "Agents").
Immediate Cash Flow and Production: Collective production of approximately 1,050 bbl/d1.
Significant Upside Identified: Production optimization via workovers and infill drilling to achieve expected production of 1,400 - 1,600 bbl/d by Q4 2023/Q1 2024 and fiscal year-ended 2024 expected production of 2,200 - 2,600 bbl/d, funded from cash flow1, with the expectation to generate US$25 million EBITDA in 20242.
Mature Development and Exploration Inventory: 2C resource of 6.5 MMboe1, including 20 bcf of natural gas and a mature prospect inventory near infrastructure. Total Prospective Resources of 29 MMboe1.
Established Operating Business: MOPL has a strong 15-year track record of safe operations in Indonesia and provides Criterium with a reputable and talented operating and technical team from which to expand operations.
Assumption of Favourable Debt: Acquiring MOPL in consideration of assuming US$32.5 million of outstanding debt which Criterium will reduce to US$19.7 million post-closing through cash payments (US$7.9 million) and conversion to equity (US$2.5 million Common Shares at closing and US$2.4 million converted in 20253). Favourable weighted average interest rate of 7.9%.
Strong Cash Position: Upon closing of the Acquisition, MOPL will hold a cash balance of approximately US$17 million (approximately US$8 million cash from the Offering and US$9 million of MOPL cash). Creating a resilient balance sheet which will utilize cash to execute drilling and workover campaigns while ensuring the debt amortization is met.
Strategic Shareholder: Upon closing of the Acquisition, Criterium will issue US$1 million common shares of the Company3 ("Common Shares") to Tourmalet Holdings Ltd. ("Tourmalet"), a company owned by the founding partners of Provident Capital Partners, a leading Southeast Asia focused investment firm which has successfully built multiple billion-dollar businesses in Indonesia. Current MOPL shareholders, which includes Tourmalet, will receive contingency payments upon certain price and production thresholds4.
For more details on this momentous development, read the official Acquisition Press Release by clicking below.
To gain a deeper understanding of our strategic vision and future prospects, read the June 2023 Investor Presentation HERE.