Exhibit 99.1
News release via Canada NewsWire, Calgary 403-269-7605
Attention Business Editors:
COMPTON OBTAINS NOTEHOLDER SUPPORT FOR RECAPITALIZATION TRANSACTION
CALGARY, Sept. 14 /CNW/ - Compton Petroleum Corporation (TSX - CMT) is
pleased to announce that the required majority of holders of the outstanding
US$450.0 million 7 5/8% senior notes due 2013 (the "Senior Notes") have
approved the recapitalization of those notes (the "Recapitalization") under
which all of the Senior Notes are to be exchanged for a combination of:
<<
- US$238.5 million of 10% senior notes due 2017 (the "New Notes"),
subject to a further note exchange as described below; and
- US$184.5 million of cash.
>>
The Recapitalization remains subject to bank and court approval, as well
as other conditions to the completion of the Recapitalization that are typical
of transactions of this nature. Compton anticipates formally applying for
court approval of the Recapitalization on or about September 17, 2010, and
that the Recapitalization will be completed on or about October 18, 2010. The
Corporation entered into support agreements with an informal ad hoc committee
of noteholders as part of the announced transaction and in respect of their
support of the Recapitalization. As a condition to the completion of the
Recapitalization, Compton has agreed with this noteholder committee to
concurrently issue to them US$45 million of Compton Finance 10% senior
mandatory convertible notes (the "Mandatory Convertible Notes") due September
2011 in exchange for US$45 million of New Notes, and to pay to those
noteholders a placement fee of US$3.7 million in connection with that
exchange. This exchange reduces the principal amount of the New Notes to
US$193.5 million.
Upon completion of the Recapitalization:
<<
- Compton will have rebalanced its consolidated capital structure by
reducing the total amount of debt outstanding by approximately
$236 million since December 31, 2009, from $616 million to
$380 million (excluding the US$45 Mandatory Convertible Notes);
- The Senior Bank Facility will be increased to an authorized limit of
$225.0 million, comprised of a revolving term facility authorized at
$210.0 million and a revolving working capital facility authorized at
$15.0 million, and two new members were added to the syndicate;
- The Senior Bank Facility's term will be changed such that, if not
extended at lenders option in 2011, the undrawn portion of the Senior
Bank Facility will be cancelled and the amount outstanding will
convert to a 365 day non-revolving term facility;
- The interest margins on the Senior Bank Facility will be reduced by
0.50% from previous levels; and
- The annual cash interest cost of Compton's consolidated outstanding
debt will be reduced by approximately $11.0 million.
>>
"We're pleased with the approval of the Recapitalization," said Tim
Granger, President and CEO. "The Recapitalization will be a significant step
in the repositioning of our existing capital structure, and we believe that it
will substantially improve capital markets' confidence in the Corporation. We
can further focus on delivering value from our assets through the effective
implementation of our strategic growth plan."
For each US$1,000 of principal amount of Senior Notes held, Noteholders
who chose Election A (the New Note option) will receive approximately US$940
of New Notes on completion of the Recapitalization. Those who chose Election B
(the cash option) will receive approximately US$537.73 of cash and US$402.27
of New Notes.
Advisories
Forward-Looking Statements
Certain information regarding the Corporation contained herein
constitutes forward-looking information and statements and financial outlooks
(collectively, "forward-looking statements") under the meaning of applicable
securities laws, including Canadian Securities Administrators' National
Instrument 51-102 Continuous Disclosure Obligations and the United States
Private Securities Litigation Reform Act of 1995. Forward-looking statements
include estimates, plans, expectations, opinions, forecasts, projections,
guidance, or other statements that are not statements of fact, including
statements regarding (i) cash flow and capital and operating expenditures,
(ii) exploration, drilling, completion, and production matters, (iii) results
of operations, (iv) financial position, and (v) other risks and uncertainties
described from time to time in the reports and filings made by Compton with
securities regulatory authorities. Although Compton believes that the
assumptions underlying, and expectations reflected in, such forward-looking
statements are reasonable, it can give no assurance that such assumptions and
expectations will prove to have been correct. There are many factors that
could cause forward-looking statements not to be correct, including risks and
uncertainties inherent in the Corporation's business. These risks include, but
are not limited to: crude oil and natural gas price volatility, exchange rate
fluctuations, availability of services and supplies, operating hazards, access
difficulties and mechanical failures, weather related issues, uncertainties in
the estimates of reserves and in projection of future rates of production and
timing of development expenditures, general economic conditions, and the
actions or inactions of third-party operators, and other risks and
uncertainties described from time to time in the reports and filings made with
securities regulatory authorities by Compton. Statements relating to
"reserves" and "resources" are deemed to be forward-looking statements, as
they involve the implied assessment, based on estimates and assumptions, that
the reserves and resources described exist in the quantities predicted or
estimated, and can be profitably produced in the future.
The forward-looking statements contained herein are made as of the date
of this news release solely for the purpose of generally disclosing Compton's
update regarding the Plan of Arrangement and Recapitalization transactions.
Compton may, as considered necessary in the circumstances, update or revise
the forward-looking statements, whether as a result of new information, future
events, or otherwise, but Compton does not undertake to update this
information at any particular time, except as required by law. Compton
cautions readers that the forward-looking statements may not be appropriate
for purposes other than their intended purposes and that undue reliance should
not be placed on any forward-looking statement. The Corporation's
forward-looking statements are expressly qualified in their entirety by this
cautionary statement.
About Compton Petroleum Corporation
Compton Petroleum Corporation is a public company actively engaged in the
exploration, development and production of natural gas, natural gas liquids,
and crude oil in western Canada. Our strategy is focused on creating value for
shareholders by providing appropriate investment returns through the effective
development and optimization of assets. The Corporation's operations are
located in the Deep Basin fairway of the Western Canada Sedimentary Basin. In
this large geographical region, we pursue three deep basin natural gas plays:
the Rock Creek sands at Niton in central Alberta, the Basal Quartz sands at
High River in southern Alberta, and the shallower Southern Plains sand play in
southern Alberta. In addition, we have an exploratory play at Callum/Cowley in
the Foothills area of southern Alberta. Being in the Deep Basin, all areas
have multi-zone potential, providing future development and exploration
opportunity. Natural gas represents approximately 84% of reserves and
production. Compton's shares are listed on the Toronto Stock Exchange under
the symbol CMT.
%CIK: 0001043572
/For further information: Susan J. Soprovich, Director, Investor
Relations, Ph: (403) 668-6732; C.W. Leigh Cassidy, Vice President, Finance &
CFO, Ph: (403) 205-5812, Fax: (403) 237-9410, Email:
investorinfo(at)comptonpetroleum.com, Website: www.comptonpetroleum.com/
(CMT. CMZ)
CO: Compton Petroleum Corporation
CNW 18:32e 14-SEP-10
