Calgary, AB – November 27, 2014 – Dixie Energy Trust (“Dixie” or the “Trust“) is pleased to report its financial results for the three and nine months ended September 30, 2014. Dixie’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2014 and related management’s discussion and analysis (“MD&A”) have been filed with the applicable securities regulators and are available on the Trust’s website at DixieEnergyTrust.com and on SEDAR at sedar.com. All figures are presented in Canadian dollars unless otherwise indicated.
Summary of Financial Results for the Three and Nine Months ended September 30, 2014
For the three months ended September 30, 2014, Dixie had oil and natural gas revenues, net of royalties of $642,942, net income of $2,259,941 and net income (on a basic and fully diluted basis) of $0.06 per trust unit. The Trust’s total comprehensive income for the period, which included a foreign currency translation gain of $1,527,988, was $3,787,929. For the nine months ended September 30, 2014, Dixie had oil and natural gas revenues, net of royalties of $1,953,680, net income of $1,394,876 and net income (on a basic and fully diluted basis) of $0.04 per trust unit. The Trust’s total comprehensive income for the period, which included a foreign currency translation gain of $1,591,393, was $2,986,269.
As of September 30, 2014, the cash and cash equivalents of the Trust was $4,189,712 with a working capital deficiency of $10,209,285.
Highlights for the Three and Nine Months ended September 30, 2014
- During the third quarter of 2014, Dixie’s average reported oil and gas production was 95 boepd (94% oil and NGLs) and its netback was US$51.02 per boe. During the third quarter, Dixie’s average oil sale price was US$102.14 per boe. During the nine months ended September 30, 2014, Dixie’s average oil and gas production was 102 boepd (95% oil and NGLs) and its netback was US$48.61 per boe. During the nine months ended September 30, 2014, Dixie’s average oil sale price was US$99.07 per boe.
- On August 5, 2014, Dixie closed an acquisition of interests in certain oil and gas properties in the Black Warrior Basin in Mississippi for a purchase price of US$8.1 million. As part of the acquisition, Dixie assumed operatorship of certain wells that are jointly owned by Dixie and its other working interest partners in the Maple Branch Prospect.
- On July 31, 2014, Dixie Energy Holdings (US), Inc. and Dixie Energy Holdings (Canada) Ltd. each entered into a short term loan agreement, for an aggregate principal amount $13.5 million. The loans bear interest at a rate of 15% per annum and each mature and become fully repayable on October 30, 2015.
Subsequent to September 30, 2014
On November 18, 2014, Dixie announced that it had entered into a purchase and sale agreement (“Agreement”) with Gulf Pine Energy Partners, LP, a Delaware limited partnership (the “Purchaser”). Under the Agreement, the Purchaser has agreed to purchase all or substantially all of the assets of the Trust, being all of its right, title and interest in oil and gas assets held indirectly by the Trust and other administrative assets of the Trust held by Dixie Energy Ltd. (the “Administrator”) on behalf of the Trust, directly and indirectly, for total cash consideration of US$47,500,000, subject to adjustment in certain circumstances (the “Sale Transaction”).
Dixie also announced in conjunction with the Sale Transaction that the Administrator is proposing the winding-up of the Trust, including the liquidation of the Trust and the distribution to holders (the “Unitholders”) of Dixie trust units, on a pro-rata basis, of the cash proceeds of the sale of the Trust’s assets after provision for the payment, retirement or discharge of all of the Trust’s obligations and liabilities (the “Winding-Up”).
Dixie further announced that Unitholders will be asked to approve the Sale Transaction and Winding-Up at the annual and special meeting of Unitholders (“Meeting”) scheduled for December 29, 2014. For further information on the proposed Sale Transaction and Winding-Up, please refer to Dixie’s news release distributed on November 18, 2014 available on SEDAR under the profile of the Trust.
As at November 27, 2014, Dixie has a cash position of $2.6 million and a working capital deficiency of approximately $12.5 million.
About Dixie Energy Trust
Dixie is an energy trust created to provide investors with an oil and gas exploration focused investment. The strategy of Dixie is to acquire, exploit and develop, indirectly through its subsidiaries, long-life crude oil and gas prospects and reserves in the United States gulf coast states, primarily in Mississippi and Alabama. Additional information is available on DixieEnergyTrust.com.
For further information please contact:
Ian Atkinson, President & CEO
T: 403 232 1010
Note regarding non-IFRS financial measures
This press release makes reference to the term “netback” which is a non-IFRS financial measure that does not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other issuers. Management of Dixie believes that “netback” provides useful information to investors and management since such measures reflect the quality of production and the level of profitability of Dixie’s oil and gas operations. Netback is calculated by subtracting royalties, production taxes, transportation and operating costs from gross revenues. Other financial data has been prepared in accordance with IFRS.
Oil and Gas Disclaimers
“bbl” means barrel; “boe” means barrel of oil equivalent; and “boepd” means barrels of oil equivalent per day.
Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.
Forward Looking Statement Disclaimer
Certain statements included in this news release constitute forward looking statements or forward looking information under applicable securities legislation. Such forward looking statements or information are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Forward looking statements or information typically contain statements with words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “project” or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this news release include, but are not limited to, the proposed Sale Transaction and Winding-Up including the Meeting in respect thereof; the process of Winding-Up of the Trust (including timing of commencement and completion thereof); and the anticipated distribution to Unitholders of cash proceeds (after provision for the Trust’s obligations and liabilities).
Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Dixie believes that the expectations reflected in such forward looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because Dixie can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this news release, assumptions have been made regarding, among other things, that the terms of the Agreement will remain the same and will not be subject to amendment or termination, the closing of the Sale Transaction will close at the time, and in the manner, described in the Agreement and herein, Unitholders will receive on a pro-rata basis proceeds from the remaining cash assets, and Dixie’s analysis of the Trust’s obligations including tax and other liabilities of the Trust is accurate. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.
Forward looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Dixie and described in the forward looking statements or information. These risks and uncertainties which may cause actual results to differ materially from the forward looking statements or information include, among other things, changes to the terms of the Agreement, failure to complete the Sale Transaction in a timely manner (or at all), failure to receive approval from the Unitholders, among other approvals, for the Sale Transaction and Winding-Up, and the ability to subsequently proceed with the Winding-Up on a timely basis (or at all) including the distribution of the remaining assets of the Trust to its Unitholders and the amount of any such distribution. The actual results, performance or achievement could differ materially from those expressed in or implied by these forward looking statements, and, accordingly, no assurance can be given that any of the events anticipated to occur or transpire as described in the forward looking statements will provide any benefits to the Trust or the Unitholders. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties. Additional information on these and other factors that could affect Dixie’s operations or financial results are included in reports on file with applicable securities regulatory authorities and may be accessed through the SEDAR website under the profile of the Trust (www.sedar.com).
The forward looking statements or information contained in this news release are made as of the date hereof and Dixie undertakes no obligation to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise unless required by applicable securities laws. The forward looking statements or information contained in this news release are expressly qualified by this cautionary statement.
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