Equal Energy Ltd. (EQU) SEC Filing 10-Q Quarterly report for the period ending Monday, March 31, 2014

Equal Energy Ltd.

CIK: 1492832 Ticker: EQU

Exhibit 99.1




OKLAHOMA CITY, May 8, 2014 – Equal Energy Ltd. (“Equal”, “the Company”, “we” or “our”) (NYSE: EQU; TSX: EQU) is pleased to announce our operating and financial results for the three months ended March 31, 2014. All dollar amounts are in U.S. dollars unless otherwise indicated and volumes are net of royalty payments.

“Equal’s first quarter results benefited from both increased production rates and higher commodity prices. The impact of the cold winter this year created both positives and negatives for Equal. We experienced increased demand for natural gas and propane, but the extreme cold also hindered production and forced downtime which resulted in higher workover expenses during the quarter,” said Don Klapko, President and Chief Executive Officer. Mr. Klapko further stated that “On May 1st, we announced that an amendment extending the original Arrangement Agreement with Petroflow had been signed after documentation that Petroflow had secured financing commitments was provided to our Board. The amendment provides for two $0.05 dividend payments by Equal to our shareholders, an updated capital expenditure program, anticipated incremental general and administrative costs and an extension of the outside termination date of the agreement to July 31, 2014.”

Solid Operating Results


    First quarter production averaged 6,973 boe/d, an increase of 11% from the 6,280 boe/d produced in the first quarter of 2013


    Average production expenses per boe were $6.47/boe, representing an increase of 6% from 2013 due to higher workover expense during the quarter


    Oil, gas and NGL revenue per boe, excluding the impact of commodity contracts, increased by 35% over 2013, the result of higher realized prices

It is important to note that our operating covenants in the Arrangement Agreement (as defined below) influenced our operational activities for the quarter. As per terms of the Arrangement Agreement, and at the request of Petroflow, we reduced our capital expenditure program through April 2014. Our Arrangement Agreement with Petroflow is the result of a process officially undertaken in March 2013 by a committee of three independent directors (the “Special Committee”) and resulted in the Arrangement Agreement announced by Equal at the end of 2013 and the Amendment (as defined below) announced by Equal on May 1, 2014.

Arrangement Agreement and Amendment

On December 9, 2013, Equal announced that it had entered into a definitive agreement (“Arrangement Agreement”) with Petroflow Energy Corporation and Petroflow Canada Acquisition Corp. (collectively “Petroflow”) for the cash purchase of all of the issued and outstanding common shares of Equal at a price of $5.43 per share, on a fully-diluted basis. The transaction will be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) (the “Arrangement”). Equal’s Board of Directors unanimously resolved to recommend that Equal’s shareholders vote in favor of the Arrangement.

On May 1, 2014, the Arrangement Agreement was amended (the “Amendment”) subsequent to Petroflow securing debt financing commitment letters in order to (a) extend the outside termination date contained therein from May 1, 2014 to July 31, 2014, (b) permit Equal to declare and pay a cash dividend of $0.05 per common share to shareholders on May 28, 2014, (c) permit Equal to pay a cash dividend of $0.05 cents per common share to its common shareholders who are entitled to receive Arrangement consideration upon the completion of the Arrangement and (d) amend an approved budget for Equal, agreed to by all the parties to the Arrangement Agreement.

The Arrangement Agreement is the result of a strategic review process undertaken by the Special Committee at the beginning of 2013 in response to the unsolicited expression of interest by a third party. The Special Committee was formed to consider a full range of strategic alternatives in order to maximize shareholder value. Alternatives considered by Equal included continuing as an independent public company, the acceleration of capital deployed in developing assets, a corporate sale, a return of capital to shareholders via dividend distribution or share buyback, a master limited partnership, and an acquisition by an outside party.

The following information was filed by Equal Energy Ltd. (EQU) on Thursday, May 8, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Equal Energy Ltd.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2014 10-K Annual Report includes:

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  • Board Members
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  • Peers / Competitors



Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets (unaudited)
Consolidated Balance Sheets (unaudited) (parenthetical)
Consolidated Statements Of Cash Flows (unaudited)
Consolidated Statements Of Changes In Shareholders' Equity (unaudited)
Consolidated Statements Of Income And Comprehensive Income (unaudited)
Accounts Receivable
Accounts Receivable (tables)
Accounts Receivable - Components Of Account Receivable (detail)
Asset Retirement Obligation
Asset Retirement Obligation (tables)
Asset Retirement Obligations - Reconciliation Of The Asset Retirement Obligation (detail)
Basis Of Presentation And Significant Accounting Policies
Basis Of Presentation And Significant Accounting Policies (policies)
Commodity Contracts
Commodity Contracts (tables)
Commodity Contracts - Additional Information (detail)
Commodity Contracts - Summary Of Financial Derivatives Outstanding (detail)
Convertible Debentures
Convertible Debentures - Additional Information (detail)
Discontinued Operations
Discontinued Operations - Additional Information (detail)
Earnings Per Share
Earnings Per Share (tables)
Earnings Per Share - Additional Information (detail)
Earnings Per Share - Summary Of Computation Of Weighted-average Common And Common Equivalent Shares (detail)
Earnings Per Share - Summary Of Computation Of Weighted-average Common And Common Equivalent Shares (parenthetical) (detail)
Fair Value Measurements
Fair Value Measurements (tables)
Fair Value Measurements - Carrying Value And Fair Value Measurements Of Financial Assets And Liabilities (detail)
Long-term Debt
Long-term Debt - Additional Information (detail)
Share-based Compensation
Share-based Compensation (tables)
Share-based Compensation - Additional Information (detail)
Share-based Compensation - Summary Of Activity Related To Options Granted (detail)
Share-based Compensation - Summary Of Restricted Shares (detail)
Subsequent Events
Subsequent Events - Additional Information (detail)
Ticker: EQU
CIK: 1492832
Form Type: 10-Q Quarterly Report
Accession Number: 0001193125-14-190363
Submitted to the SEC: Thu May 08 2014 5:26:50 PM EST
Accepted by the SEC: Thu May 08 2014
Period: Monday, March 31, 2014
Industry: Crude Petroleum And Natural Gas

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