Exall Energy Corporation provides refinancing update

CALGARY, Nov. 5, 2014 /CNW/ - Exall Energy Corporation ("Exall" or the "Company") (TSX:EE and TSX:EE.DB) announced today that in order to complete the previously announced refinancing (see October 6, 2014 press release), it has entered into a forbearance agreement ("Forbearance Agreement") with its current senior Canadian lender.  The Forbearance Agreement allows for a monitor to report on, amongst other information, the progress relating to the refinancing under a monitoring agreement ("Monitoring Agreement"), and the initiation of a formal sales process in relation to the Company and its assets.  On taking these steps, and provided Exall meets all its obligations under the Forbearance Agreement and the Monitoring Agreement, Exall's senior Canadian lender has agreed to a forbearance period that could extend until up to February 13, 2015.

Exall also announced that further to its October 6, 2014 announcement, one of the syndicate members that was providing the underlying funding for a debenture purchase agreement (the "Agreement") with a private Canadian lender (the "Lender") is continuing the process that Exall expects will pay out Exall's existing facility with Exall's current senior Canadian lender (the "Facility") in full, in consideration for an assignment of the Facility and the senior Canadian lender's security package.  Exall expects that closing of this refinancing transaction will occur on or around Friday, November 14, 2014.  If closing of the refinancing with the Lender is completed on the terms contemplated it would result in payment in full of all obligations owing to Exall's current senior Canadian lender and the Forbearance Agreement and the Monitoring Agreement would both terminate immediately. 

The Lender intends to complete the original Agreement by mid-November with Exall, at which time the interim lender will be paid out in full by replacing the Facility with a $35 million debenture, fully secured by Exall's assets (the "Debenture").  At that point the other related transaction described in the September 25, 2014 Exall press release, being the purchase of 15 million common shares of Exall, at 20 cents per share, for total gross proceeds to Exall of $3,000,000 under a private placement, is expected to close.

Exall also advised that the sale transaction previously announced whereby a private company would acquire approximately eighteen percent (18%) of Exall's interest in its oil and gas assets (being approximately a thirteen percent (13%) working interest in and to the Marten Mountain discovery in the Mitsue area, north-central Alberta) for proceeds of $14 Million has not closed.  Exall is continuing discussions with the private company but at this time there are no assurances that this transaction will close.  The proceeds from this transaction had been earmarked as development funding for its properties and Exall is now evaluating alternative sources of funding.

About Exall

Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta.  Exall is currently developing the new Mitsue area "Marten Mountain" discovery in north-central Alberta.

Exall currently has 66,634,854 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE. The Company's convertible debentures are listed on the Toronto Stock Exchange under the trading symbol EE.DB

Exall's public filings can all be found at www.exall.com or www.sedar.com.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

SOURCE: EXALL ENERGY CORPORATION