Raging River Exploration Inc. Announces the Closing of $69 Million Bought Deal Financing and $120 Million Capital Expenditure Budget for 2013 Press Release: Raging River Exploration Inc. – 30 minutes ago
CALGARY, ALBERTA--(Marketwire - Dec. 18, 2012) -
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Raging River Exploration Inc. ("Raging River" or the "Company") (TSX VENTURE:RRX) has closed its previously announced bought deal financing. A total of 26,000,000 Raging River common shares have been issued at a price of $2.65 per share for gross proceeds of $68.9 million (the "Financing").
The syndicate of underwriters was co-led by Peters & Co. Limited and FirstEnergy Capital Corp. and included, Dundee Securities Ltd., Desjardins Securities Inc., Paradigm Capital Inc., CIBC, National Bank Financial Inc., Cormark Securities Inc., and Scotia Capital Inc.
The net proceeds from the Financing will be used to reduce outstanding indebtedness under the Company's current credit facility, a portion of which will be used to fund the acquisitions previously announced in a press release dated November 27, 2012 and as discussed below.
The acquisition of certain oil and gas assets from a senior energy producer closed on November 30, 2012. The acquisitions of the two private companies have substantially been completed, subject to satisfying the final closing conditions, including receiving the approval of the TSX Venture Exchange.
The Company confirms that its credit facility has been increased to $100 million from $65 million with the same terms and conditions as previously disclosed.
The Company is also pleased to announce a $120 million capital development budget for 2013. 100% of the budget will be focused in our core southwest Saskatchewan Viking light oil resource play. Execution of the planned expenditures is expected to increase the 2013 average daily production by approximately 109% to 4,600 boe/d (95% oil) from our 2012 average of 2,200 boe/d. The 2013 forecast exit rate is expected to be approximately 5,400 boe/d, a greater than 45% increase from our 2012 forecast exit rate of 3,700 boe/d.
The 2013 budget includes the drilling of 115 net horizontal Viking oil wells. Total on-stream costs (drilling, completion and equipping) are expected to be $108 million or 90% of the approved budget. The remaining $12 million is allocated to land, seismic and maintenance capital throughout the Dodsland area. The budget will be financed through funds from operations, anticipated to be in excess of $80 million and, the utilization of our existing credit facility. Based on an assumed 2012 average Edmonton Light oil price of $80/bbl, the Company expects to exit 2013 with net debt of approximately $54 million or 0.65 times debt to trailing estimated 2013 funds from operations.
The 115 net wells to be drilled represent approximately 10% of our currently defined low risk drilling inventory. Based on the current pace of development, the Company has a 10 year drilling inventory positioning us for long term, sustainable per share production, reserves and value growth.
Raging River anticipates that the price differentials between WTI and Edmonton Light oil will remain volatile through 2013. We have therefore assumed an average price of $80/bbl for Edmonton Light. The Company continues to actively manage our differentials through increasing our crude deliveries on rail and anticipate having up to 30% of our corporate oil volumes on rail in January.
We are pleased to report that our previously disclosed exit rate of 3,700 boe/d was achieved in early December. Our 2012 capital program has been completed and we anticipate being back actively drilling in early January 2013. Our budget contemplates drilling 30 net wells during the first quarter of 2013.
The Company's guidance for 2013 is as follows:
| Average daily production || || |
| || Crude oil and NGLs (bbls/d) || 4,400 || |
| || Natural gas (mcf/d) || 1,200 || |
| || Barrels of oil equivalent (boe/d) || 4,600 || |
| || Exit barrels of oil equivalent (boe/d) || 5,400 || |
| || || |
| Financial || || |
| || Funds flow from operations ($000) || 82,500 || |
| || || Per share - basic || 0.53 || |
| || 2013 exit net debt ($000) || 54,000 || |
| || || |
| Pricing || || |
| || Edmonton Light oil ($/bbl) || 80.00 || |
| || Raging River oil ($/bbl) || 75.00 || |
| || Natural gas ($/GJ) || 3.00 || |
| || || |
| Netbacks ($/boe) || || |
| || Operating || || |
| || || Oil and gas sales || 72.55 || |
| || || Royalties || (6.80 || ) |
| || || Operating expenses || (12.50 || ) |
| || || Transportation || (1.75 || ) |
| || Operating netback ($/boe) || 51.50 || |
| || || |
| Capital expenditures || || |
| || Drilling, completion & equipping ($000) || 108,000 || |
| || Land, seismic and maintenance ($000) || 12,000 || |
| Total ($000) || 120,000 || |
| || || |
Raging River's experienced management team remains committed to operational and executional excellence to continue delivering per share value growth to our shareholders while maintaining balance sheet strength.