Twin Butte Energy to combine with Emerge Oil & Gas to create a sustainable model of income and production growth
CALGARY, Nov. 13, 2011 /CNW/ - Twin Butte Energy Ltd. (TSX: TBE) ("Twin Butte" or the "Company") and Emerge Oil & Gas Inc. ("Emerge") (TSX: EME) are pleased to announce that they have entered into an arrangement agreement providing for the acquisition by Twin Butte of all of the outstanding common shares of Emerge (the "Emerge Shares") on the basis of 0.585 of a common share of Twin Butte ("Twin Butte Share") for each outstanding Emerge Share (the "Transaction"). Based on the five day weighted average price of the Twin Butte Shares ended November 11, 2011 of $1.97, the exchange ratio for the Transaction represents a deemed price of $1.15 per Emerge Share, representing a 21 percent premium to the five day weighted average price of $0.95 for the Emerge Shares on November 11, 2011.
The deemed purchase price is approximately $170 million in value, comprised of the issuance of approximately 54 million Twin Butte Shares (at a deemed price of $1.97 per Twin Butte Share) and the assumption of approximately $63 million in net debt estimated at closing.
Osinko
Management has reviewed the combined Twin Butte and Emerge asset base, and believes there is the opportunity to provide attractive total returns to investors by providing both sustainable income (via dividends) and moderate internal production growth. The oil leveraged combined assets have the potential to generate sufficient cash flow to pay strong dividend while leaving sufficient cash flow to fund internally generated annual production growth, targeted at approximately 3 to 5 percent.
Subject to the completion of the Transaction, the Twin Butte Board of Directors has approved an initial annualized dividend of $0.18 per share that is anticipated to be declared in the first month subsequent to completion of the Transaction. Based on Twin Butte's closing share price on November 11, 2011 of $1.94, this would provide a 9.3 percent yield. The dividend, on an annualized basis, would require $34.1 million or 34 percent of the combined Company's estimated 2012 pro-forma cash flow of approximately $100 million ($US90 WTI and $3.50/gj, AECO) based on estimated average pro-forma 2012 production of 13,700 boe/d. Twin Butte anticipates allocating approximately $66 million to capital expenditures. Twin Butte has significant tax pool coverage that is anticipated to provide shareholders with a tax efficient yield vehicle.
Noin 8.5% yield TBE:n tämän hetken kurssilla. Osinko näyttää suhteellisen kestävältä, mutta näissä oloissa käyttäisin 80-85 dollarin WTI-strippiä, jolloin hiukan tiukkaa tekee tuo pelkän kassavirran varassa eläminen. Jos tuo WTI kuitenkin pysyy tuolla tasolla niin odottaisin efektiivisen osinkotuoton laskevan 6-7% osakkeen hinnan noustessa 20-40%. Tiedote kertoo, että pro forma pankkilimiiteistä käytössä on 71%.
Mahdolliset tulevaisuuden Frog Laken EOR-projektit sitovat aika paljon pääomaa, joten jossain vaiheessa pääomaa joudutaan taas keräämään tulevina vuosina. Osingonmaksu laajentaa potentiaalista sijoittakuntaa, mutta toisaalta johtaa kassavirtaa ulos yhtiöstä.
Kehityssuunta oli odotettavissa: suht terveellä pohjalla oleva yield kelpaa melkein kaikille näinä päivinä ja kasvutarinoiden myynti on huomattavasti vaikeampaa.
