/NOT FOR DISSEMINATION IN THE U.S. OR THROUGH
U.S. NEWSWIRES/
CALGARY, April 9, 2020 /CNW/ - Highwood Oil Company Ltd.
(TSXV:HOCL) ("Highwood" or the "Corporation")
announces revisions to the previously announced 2020 capital budget
and an update to operations in 2020.
2020 Capital Budget
Given the weakness and uncertainty in today's future oil price
environment and the advent of the COVID-19 outbreak, Highwood has
chosen to cease all non-discretionary capital activity for the
balance of 2020 until realized pricing in Western Canada rebounds from these historic
lows. Highwood's main goal in these times will be to protect
its balance sheet.
Highwood had previously planned to drill between 12 and 18 gross
wells (6-9 net) in the Clearwater
play over 2020. The Corporation successfully drilled 5 gross
(2.5 net) wells in the Clearwater
in January & February 2020 before
the industry saw the drastic decline in market pricing.
Operational Update
Highwood has evaluated economics for all production fields and
has shut-in production which is uneconomic in today's price
environment. Current production from Highwood is
approximately 250 bbl/d of oil proforma the previously announced
Red Earth divestiture from February
18, 2020. Until price recoveries are seen, Highwood
does not plan to bring additional production back online.
Highwood is currently hedged an average of 467 bbl/d for the
duration 2020 at an average realized price of $66.89 CAD WTI.
Production capacity is approximately 1,150 bbl/d proforma the
Red Earth divestiture. The Red Earth divestiture continues to
be under review by the Alberta Energy Regulator where approval is
required in order to close the transaction.
Highwood has begun a series of G&A reduction initiatives
including a reduction of employee salaries and non-essential
G&A expenditures to manage cashflows during this tumultuous
period. The Corporation also plans to apply for the
Government of Canada wage subsidy
initiative in response to the Covid-19 outbreak.
Warnings
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the Exchange)
accepts responsibility for the adequacy or accuracy of this press
release.
This news release contains forward-looking statements
relating to the future operations of the Corporation and other
statements that are not historical facts. Forward-looking
statements are often identified by terms such as "will", "may",
"should", "anticipate", "expects" and similar expressions. All
statements other than statements of historical fact, included in
this release, including, without limitation, statements regarding
the future plans and objectives of the Corporation, are
forward-looking statements that involve risks and uncertainties.
There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ
materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from
the Corporation's expectations include risks detailed from time to
time in the filings made by the Corporation with securities
regulations.
The reader is cautioned that assumptions used in the
preparation of any forward-looking information may prove to be
incorrect. Events or circumstances may cause actual results to
differ materially from those predicted, as a result of numerous
known and unknown risks, uncertainties, and other factors, many of
which are beyond the control of the Corporation. The reader
is cautioned not to place undue reliance on any forward-looking
information. Such information, although considered reasonable by
management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement. The
forward-looking statements contained in this news release are made
as of the date of this news release and the Corporation will update
or revise publicly any of the included forward-looking statements
as expressly required by Canadian securities law.
SOURCE Highwood Oil Company Ltd.