Each one in plain English, with the numbers worked through for a shareholder.
9 July 2012capital raising announcement● NeutralMajor
Compton agreed a deal with MFC Industrial Ltd., which will offer $1.25 in cash per share for all Compton shares (about $33.0M based on 26,358,528 shares outstanding). The board unanimously recommends shareholders tender. Holders of about 54% of the shares have signed lock-up agreements with MFC, and the offer is conditional on at least 66 2/3% of fully-diluted shares being deposited, regulatory approvals, lender approval of a continued credit facility and agreement from the MPP term financing providers. Separately, MFC will buy 6,548,498 special warrants at $1.25 for about $8.2M (about 24.8% dilution, giving MFC 19.9% of the then-outstanding shares), with the money held in escrow until lender consent and then used with the Bigoray sale proceeds to partly repay the $30.0M overdrawn on the credit facility. The lenders extended the cure period to the earliest of September 30, 2012 (extendable to as late as October 30, 2012), completion of the offer, or lender termination. This follows the many short extensions and the July 5 Bigoray sale, and it is the first concrete recapitalization outcome after weeks of unspecified 'progress'. The offer is expected to close by early September 2012.
5 July 2012asset acquisition disposition● NeutralMajor
Compton agreed to sell its Bigoray assets near Niton in central Alberta, plus about 5,600 gross acres of Cardium mineral rights at Niton, for expected gross proceeds of $17.0 million, subject to lender approval. The money would repay part of the $30.0 million drawn over the $110.0 million credit facility limit, so it covers only part of the overshoot. The properties produced about 450 boe/d over the past three months; closing is expected at the end of July 2012, and Compton keeps about 110,900 gross acres at Niton.
The lenders extended the repayment deadline for the $30.0 million drawn over the $110.0 million credit facility limit a further two weeks, from June 22 to July 6, 2012. The company again cites continued recapitalization progress with RBC Capital Markets and gives no details.
The deadline to repay the $30.0 million drawn over the $110.0 million credit facility limit was pushed again, from June 8 to June 22, 2012. The company cites continued recapitalization progress with RBC Capital Markets; no specifics are given and the debt remains unpaid.
The lenders gave a second extension, to June 8, 2012, for repaying the $30.0 million drawn over the $110.0 million credit facility limit (previously due May 23). The release says this reflects progress on the recapitalization with RBC Capital Markets, but gives no details of that progress.
The lenders extended the deadline to repay the amount drawn above the reduced $110.0 million credit facility, originally May 7, 2012. The new date falls between May 23 (earliest) and June 8, 2012, depending on progress with the recapitalization. The lenders remain supportive of asset sales and/or an equity raise, and Compton is also looking at using its tax pool; no deal is announced.
Compton's lenders cut its credit facility from $140.0 million to $110.0 million, citing a lower natural gas price forecast; the facility is fully drawn, so the $30.0 million over the new limit is due May 7, 2012 (the lenders may extend this depending on progress). Compton hired RBC Capital Markets on March 12, 2012 to advise on recapitalizing through asset sales and/or an equity raise. Net debt is about $166.0 million, cash about $8.8 million, and 2012 guidance is 10,800-11,200 boe/d year-end production, $6.0-$10.0 million cash flow and $14.0-$16.0 million capital spending. This follows the 2011 recapitalization, which cut debt but left bank borrowing as the pressure point (bank debt rose from $103.1 million at Q3 2011 after about $35.0 million of 2011 capital spending). The lenders say they support the recapitalization plans.
Compton signed a farmout and joint venture agreement with K2 America Corp. (a subsidiary of Guardian Exploration) covering all 79,000 net acres of its Montana Bakken lands. K2 can earn a 50% interest by spending on exploration, including a survey costing at least $2.0M by July 31, 2012 and a test well started by December 31, 2012. Compton keeps a 50% working interest without having to commit capital. The deal still needs any regulatory approvals, third-party consents and a formal joint venture agreement.
Compton completed the plan of arrangement: all US$193.5M of 10% senior notes and US$45M of mandatory convertible notes were exchanged for common shares and rights. Only the rights offering remains, expiring September 20, 2011 with closing expected September 27, 2011. This ends the open question of whether the convertible notes would be repaid in cash or turned into shares. Four long-serving directors (including Chairman Mel Belich) retired and four new directors were appointed, with Adrian Loader as Chairman.
Noteholders and shareholders approved the recapitalization, and the Alberta court issued a final order. All the US$193.5M of 2017 notes and US$48.8M of mandatory convertible notes are to be turned into equity, with the 1-for-200 share consolidation going ahead. The company says it retires about $274.3M of debt and raises the bank facility's total credit capacity to $160.0M. Existing shareholders get rights to buy more shares, and the company states that those who do not use their rights will be diluted more. The rights offering is expected to close around September 21, 2011. This resolves the vote step set out in the June circular.
Compton said enough noteholders have signed support agreements to exceed the two-thirds needed to approve the recapitalization. The proxy adviser ISS recommended shareholders vote for all three resolutions (share consolidation, the recapitalization, and a stated capital reduction), though it noted the 'high level of dilution'. The shareholder meeting is July 25, 2011 and the deal is expected to take effect around August 17, 2011.
Compton circulated a proposal (dated June 24, 2011) to cut its debt further, saying continued low natural gas prices prompted it. The US$193.5M of 10% notes due 2017 and US$46.8M of mandatory convertible notes would be converted into shares. Existing shares would be consolidated 1-for-200, and existing shareholders would get warrants and rights to buy more shares at $7.82. The company says about $270.4M of debt would be retired, with noteholders getting 90.5% of the new shares. Noteholders and shareholders vote July 25, 2011. This follows the October 2010 note exchange and replaces the plan to repay or convert the mandatory convertible notes in 2011.
Compton completed the note restructuring: all the senior notes were exchanged for cash, US$193.5M of 10% senior notes due 2017 and US$45M of 10% mandatory convertible notes due Sept 15, 2011. This completes the plan proposed in July and approved by the court in September. The filing does not state the cash amount paid; the convertible notes could still lead to new shares if not repaid before maturity (per the earlier release).
Compton received the Alberta court's final order approving the plan to exchange all US$450M of 7 5/8% senior notes for cash and new 10% notes due 2017, including US$45M swapped into mandatory convertible notes due Sept 15, 2011. If any convertible notes remain at maturity, up to 65,631,345 new common shares (about 24.9% of current shares) could be issued; the TSX has conditionally approved listing them, and Compton says it has no current intention to issue shares. Completion is expected around Oct 18, 2010, subject to customary conditions. This continues the July plan.
Compton and its finance subsidiary signed an amended and restated agreement (dated Sept 7, 2010) to carry out the note restructuring by court-approved plan of arrangement. The visible text is definitions and a table of contents, including an outside completion date of Nov 30, 2010; no new terms beyond the July circular are visible. This is the formal agreement for the July plan.
Compton filed its circular proposing a plan to restructure the US$450M 7 5/8% senior notes due 2013: holders could elect cash plus 10% mandatory convertible notes due Sept 15, 2011, or new 10% notes due Sept 15, 2017, at US$940 per US$1,000 of principal, subject to caps. The mandatory convertible notes would convert into Compton common shares at maturity at 95% of a 20-day average price unless repaid in cash first, so shareholders could be diluted. The board says the plan cuts net debt by about Cdn$217.4M and would let Compton increase availability and lower the interest rate under its bank facility; noteholders vote Sept 14, 2010, with elections due Sept 10.
Compton closed the second and final Niton/Gilby asset sale in central Alberta for $35 million, bringing gross proceeds from the two sales to $150 million (the first closed at the end of June). This completes the pending sale from the prior filing; proceeds are to reduce debt and add capital for the 2010 development program. FirstEnergy Capital Corp. was Compton's financial advisor.
2 July 2010asset acquisition disposition▲ GoodMajor
Compton closed one of two sales of assets in the Niton and Gilby areas of central Alberta for $115 million; both sales together are expected to bring in $150 million gross, with the second due to close in mid-July 2010. It also received a final $9.5 million for the last 0.5% of the 5.0% overriding royalty sold after the Sept 2009 agreement. Proceeds will reduce debt and add capital for the 2010 development program. The company is now listed on the TSX only (NYSE is no longer named).
Compton said FINRA will issue its no-objection letter, so its public offering of units is set to close before markets open on Monday, Oct 5, 2009. This resolves the Sept 25 delay. The filing gives no offering size, price or share count.
Compton agreed to sell overriding royalties (a share of gross production revenue) to two parties for about $54.5 million, with an option for a further $47.5 million, up to $102.0 million in total, to repay bank debt. The royalty is 2.5%, with an option for a further 2.5% by Dec 24, 2009, and covers substantially all of its current proved, probable and possible assets. With the equity offering, total debt is expected to fall by about $263.0 million, or $216.0 million if the option is not exercised. Closing is expected in October 2009.
Compton said the closing of its previously announced public offering of units is delayed while the underwriters wait for a 'no-objection' letter from the US regulator FINRA. FINRA has not said when or whether it will issue it, but Compton says it has no reason to think it won't. The offering's size and price are not in this filing.
Compton filed copies of its bank credit agreement and amendments as exhibits: the original agreement dated Aug 15, 2007 (a $533 million extendible revolving facility plus a $30 million working capital facility, with Bank of Montreal as lead), a July 2, 2008 amendment, an Aug 26, 2008 letter agreement and a July 2, 2009 amendment. The visible text is the 2007 agreement's contents and definitions; it adds no new transaction. The 2007 agreement's size ($533 million) differs from the $353 million term facility announced in the July 2, 2009 renewal, which is consistent with the later amendments, though the amended terms are not visible here.
Compton completed the annual renewal of its reserve-based credit facility with a syndicate of four banks: a $353 million revolving term facility and a $30 million working capital facility, $383 million in total. It has drawn $340 million so far; the facility is reviewed twice a year (Dec 31 and July 2) and is up for renewal in July 2010. The company ties the facilities to its 2009 needs and its 'recapitalization objectives'. This follows the bank debt of $470M (June 2008) reduced after the 2008 property sales, and the 2008 corporate sale process, whose outcome this filing does not mention.
Compton said it is seeking a buyer for all of its shares, previously announced, and is starting marketing now with a data room opening Sept 8, 2008. Its internally prepared Aug 1, 2008 reserve update shows proved plus probable reserves of 268 million boe, versus 271 million at year-end 2007; this excludes four non-core property sales. Three of those four have closed and the fourth is due Sept 8, with net proceeds of about $210 million going to reduce bank debt. After that and a $31 million foreign exchange contract gain, pro forma long-term debt is $687 million versus $906 million at June 30, 2008. The Cecil sale left open earlier is not mentioned in the visible text.
Compton reported year-end 2007 proved plus probable reserves of 271 million boe, up 9% from 249 million, with proved reserves of 150 million boe, up 2%. It also got approval for a new buyback of up to 6,000,000 shares (about 4.6% of 129,194,721 outstanding at March 10, 2008), running March 25, 2008 to March 24, 2009, with bought shares cancelled. Under the prior bid it had bought 354,000 shares at an average of $9.75, far below the 6,000,000 limit.
Compton completed its acquisition of WIN Energy, which is now a wholly owned subsidiary. The price was $0.45 per share, up from the $0.37 first announced, plus $0.01 per warrant, for about $30 million in total versus about $24 million originally. Compton plans to have WIN delisted from the TSX Venture Exchange and stop being a reporting issuer in Canada. This completes the deal announced Sept 17.
WIN's board is postponing the Nov 22 shareholder vote on Compton's takeover to Dec 20, 2007. It says it must first assess certain recent operational developments, which the filing does not describe. Compton agreed to the delay and says it remains committed to the deal on the terms of the amended agreement, which now requires completion by Dec 28, 2007. A WIN director also resigned.
Compton completed the sale of its Worsley conventional oil assets in the Peace River Arch area to Birchcliff Energy for $270 million cash. This closes the sale announced on Sept 4 for the scheduled Sept 27 date. The filing does not say how the proceeds are used; the earlier announcement said they would reduce syndicated senior debt.
Compton agreed to buy WIN Energy by plan of arrangement for $0.37 per share and $0.01 per warrant in cash, about $24 million in total before costs. WIN holds undeveloped land in Alberta and Montana, a gas plant in the Cowley area and seismic data, and the deal would nearly double Compton's Callum/Cowley acreage to 223 sections. It needs 66 2/3% approval at a WIN meeting set for Nov 22, 2007, plus court and regulatory approvals; WIN agreed not to solicit rival offers, and in some circumstances owes Compton a $1 million fee.
Compton agreed to sell its Worsley light oil assets in Alberta to Birchcliff Energy for $270 million cash, effective July 1, closing scheduled Sept 27, 2007. Worsley produces about 3,500 boe/d and holds 15.1 million boe proved plus probable reserves, 6% of Compton's total at Dec 31, 2006. Proceeds will reduce syndicated senior debt and fund natural gas development. The separate Cecil sale is still targeted for the fourth quarter.
