Posted by Katie Woodward - OilVoice
Antrim Energy Inc. (TSX VENTURE:AEN)(AIM:AEY), today reported its financial results for the three and nine month period ended September 30, 2016.
All financial figures are unaudited and in US dollars unless otherwise noted.
At the annual and special meeting of Shareholders held on August 30, 2016, shareholders authorized the voluntary dissolution of the Corporation pursuant to Section 212 of the Business Corporations Act (Alberta) (the "Dissolution"), and following provision for satisfaction of any and all liabilities and obligations owed to the creditors of the Corporation, the return of any residual capital to shareholders.
It is the intention of the Corporation to proceed with the Dissolution and related de-listing from the TSX Venture Exchange ("TSXV"). Admission of trading the Corporation's Common Shares on AIM was cancelled with effect from 7:00 am (UK time) on September 9, 2016. The Corporation anticipates delisting from the TSXV mid-January 2017.
A return of residual capital to shareholders in the form of a cash distribution (the "Distribution") is currently estimated to be Cdn. $0.05 per Common Share (being an aggregate of approximately US $7.3 million and assuming an exchange rate for the Canadian dollar of US $0.761: Cdn $1.00). The amount of any payment(s) shall be determined by the Board after paying or making provision for the Corporation's obligations and reviewing potential tax and other liabilities of the Corporation, including costs related to the Dissolution such as the winding-up of the Corporation's subsidiaries. The Canada Revenue Agency ("CRA") and Alberta Tax and Revenue Administration ("Alberta Revenue") have adopted a policy of not reviewing applications for Tax Clearance Certificates until the company making the application has formally dissolved and filed a terminal tax return. The Corporation does not intend to make any Distribution prior to receipt of the Tax Clearance Certificates and during this interval, the Distribution amount is expected to be placed in a non-interest bearing bank account.
The precise timetable for securing the winding up and Dissolution of the Corporation and its subsidiaries cannot be accurately predicted, however, it is anticipated that the formal Dissolution and winding up of the Corporation and its subsidiaries will occur in early 2017. It is not possible to predict when a final assessment of the Corporation's 2016 tax return and Tax Clearance Certificates could be obtained from CRA or Alberta Revenue as their receipt is outside of the control of the Corporation.
To the extent that the Corporation's expenses, liabilities and obligations are higher than current estimates, or if any unforeseen obligations arise, if the Dissolution is delayed, or if the exchange rate of the U.S. Dollar versus the Canadian Dollar changes unexpectedly, the actual amount distributed to Shareholders may be lower, and possibly substantially lower, than the anticipated net asset value per Common Share based on the above figures.
Should an opportunity arise prior to completion of the Dissolution that in the Board's judgement has the potential to provide a superior return to Shareholders, the Board may in their discretion delay or revoke implementation of the Dissolution. Similarly, should an opportunity arise for the Corporation to sell any of the Corporation's subsidiaries (or assets of such subsidiaries) prior to the Dissolution, the Board may, in their sole discretion, proceed to sell such subsidiary or subsidiaries (or assets thereof) on terms acceptable to the Board.
In November 2016 Antrim announced an agreement to sell all of the issued and outstanding shares in the capital of Antrim's Ireland subsidiary, Antrim Exploration (Ireland) Limited ("Antrim Ireland") for US $0.25 million in cash, (the "Transaction") plus up to US $0.13 million conditional on certain future events. Closing of the Transaction occurred on November 28, 2016 and included in other current assets at September 30, 2016 is US $0.25 million pertaining to the sale.
UK North Sea Licences
Antrim's interest in the Fyne Licence (P077 Block 21/28a) is to expire on November 25, 2016 and Antrim has filed an application with the UK Oil and Gas Authority to relinquish its interest in the Erne Licence (P1875 Block 21/29d). The carrying value of the Fyne and Erne Licence at September 30, 2016 is $nil (December 31, 2015 - $nil).
Application of Liquidation Basis of Accounting
The Corporation adopted the liquidation basis of accounting effective July 1, 2016. This basis of accounting is considered appropriate when, among other things, liquidation of the Corporation is imminent. Assets are measured at net realizable value and all existing liabilities continue to be carried at their historical values. All costs expected to be incurred through the end of liquidation are accrued. In converting from the going concern basis to the liquidation basis of accounting, the Corporation was required to make a net adjustment by recording an increase in net assets of $0.2 million and accrual of liquidation costs of $1.5 million, which is included in the Consolidated Statement of Changes in Net Assets.
Financial Resources and Liquidity
At September 30, 2016 the Corporation had net assets in liquidation of US $7.3 million or Cdn $0.05 per outstanding share (based on an exchange rate for the Canadian dollar of US $0.761: Cdn $1.00 and 184,731,076 Common Shares outstanding). This includes management estimates made as of September 30, 2016, and does not necessarily reflect the final amount that may be available to the Corporation for distribution to Shareholders (see Risks and Uncertainties included in management's discussion and analysis for the period ended September 30, 2016 ("MD&A")).
The Board of Directors of the Corporation has concluded that it is in the best interest of the Shareholders and the Corporation to proceed with the voluntary liquidation and dissolution of the Corporation (in the absence of any potential alternative transaction to date that the Board believes would be satisfactory to shareholders).
The precise timetable for securing the winding up and Dissolution of the Corporation and its subsidiaries cannot be accurately predicted, however, it is anticipated that the formal Dissolution and winding up of the Corporation and its Subsidiaries will occur in early 2017. In connection with the Dissolution, the Corporation proposes to delist from the TSXV in mid-January 2017 and will provide further information about the proposed delisting in a future press release. The Corporation will also provide instructions to Shareholders describing the procedures to be followed to effect the Distribution and the anticipated timing thereof.
The Board retains the discretion not to proceed with the Dissolution if the Board determines that it is no longer in the best interests of the Corporation and the Shareholders.
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