Pinch chart perfection... if not exactly what you ever want to see in terms of actual company operations:
COUGF is a case study in "if it can go wrong, it will"
"Over the last several months, the Company has had its operations reduced, its expenses increased and its net income reduced as a result of the Rainbow Pipeline break, the wild fires of the Slave Lake area and a short term drop in commodity prices. Because of the capital conditions due to the last recession and the ongoing problems in the European capital markets, the availability of funding for operations and capital expenditures has become more restricted and expensive"
"On November 15, 2011, the potential purchaser under a Binding Letter of Intent to acquire some of the Company's non-core assets defaulted on its agreements."
"The sale of these assets would have removed a requirement to increase the ERCB LMR deposit ("long term well abandonment liability deposit"). Because the potential purchaser asked for multiple extensions and placed a partial deposit, the Company agreed to several extensions of the closing. However, the potential purchaser did not meet the closing conditions or provide required pre-closing information to the ERCB. As a result the ERCB prohibited the transfer of the wells and the potential purchaser defaulted on the purchase of the Company's none core assets. The delays in the acquisition process then resulted in the ERCB putting Cougar on notice to increase its LMR deposit." "To date, because the Company was not able to fund the $630,000 LMR deposit in a manner satisfactory to the ERCB, the ERCB has ordered the wells and facilities of the Company shut in until the LMR deposit is made and the ERCB requirements are met. The Company immediately appealed the order and is reviewing its options in seeking damages due to the default of the potential purchaser under the terms of the Binding Letter of Intent. The Company operations were shut in starting on January 23, 2012. The Company continues to seek sufficient financing to get the wells turned back on."
"The Board of Directors of Cougar has therefore decided to seek CCAA protection after considering its currently available alternatives. CCAA protection stays creditors and others from enforcing rights against the Company and affords the Company the opportunity to restructure its financial affairs. The Court has granted CCAA protection until March 2 , 2012, to be further extended as required and approved by the Court."
Cougar Oil and Gas Canada Enters Into Creditor Protection Following Failure of Purchaser to Complete an Asset Acquisition |
