/EINPresswire.com/ -- CALGARY, ALBERTA--(Marketwired - May 25, 2017) - Trilogy Energy Corp. ("Trilogy" or the "Company") (TSX:TET) is pleased to announce that it has entered into an agreement to sell certain Duvernay assets in the Kaybob area of Alberta and provide an update on its previously announced asset sale in the Grande Prairie area of Alberta.

Kaybob Duvernay Asset Sale

Trilogy has entered into a definitive agreement to sell approximately 9.75 net sections of Duvernay mineral rights in its Kaybob Duvernay play and its 11.0% interest in a non-operated gas plant for cash consideration of $60 million (before adjustments).

The predominantly non-operated Duvernay sale assets have an average production (net to Trilogy) of approximately 640 Boe/d (2.6 MMcf/d of natural gas and 200 Bbl/d of natural gas liquids) for the month of April, 2017. The transaction includes Trilogy's Total Proved Developed Producing reserves attributable to such assets of approximately 879 MBoe as of December 31, 2016, based on the year end reserves estimate completed by Trilogy's independent reserves evaluator. After completion of this sale, Trilogy will continue to hold a substantial land position in the Kaybob area Duvernay play with approximately 175 net sections (112,000 net acres) of land in areas prospective for Duvernay shale development.

The sale is effective May 1, 2017 and is expected to be completed on or about May 31, 2017.

Grande Prairie Area Asset Sale Update

Trilogy also confirms that its previously announced sale of certain Valhalla assets in the Grande Prairie area of Alberta for cash consideration of $50 Million (before adjustments) remains conditional pending purchaser's receipt of the Alberta Energy Regulator ("AER") approvals for the transfer of the wells, pipelines and facilities. The sale is effective May 1, 2017 and is expected to be completed by the end of May provided the AER approvals are received.

Borrowing Base

Proceeds from the sale of the two transactions described above will be applied to reduce Trilogy's indebtedness under its revolving credit facility. Upon closing of the Valhalla area asset sale, Trilogy's borrowing base will be reduced from $300 million to $290 million. Upon closing of the Duvernay asset sale, Trilogy's borrowing base will be reduced from $290 million to $285 million. Provided that both of these transactions close by the end of May, 2017, proforma, Trilogy will be drawn $175 million as at May 31, 2017 under its revolving credit facility leaving Trilogy with capacity of $110 million under such facility.

Production Outlook

After positive first quarter operational results and factoring in the impact of the two above mentioned asset sales, Trilogy maintains its current average 2017 annual production guidance of 24,000 Boe/d.

About Trilogy

Trilogy is a petroleum and natural gas-focused Canadian energy corporation that actively develops, produces and sells natural gas, crude oil and natural gas liquids. Trilogy's geographically concentrated assets are primarily high working interest properties that provide abundant low-risk infill drilling opportunities and good access to infrastructure and processing facilities, many of which are operated and controlled by Trilogy. Trilogy's common shares are listed on the Toronto Stock Exchange under the symbol "TET".

Forward-Looking Information

Certain information included in this news release constitutes forward-looking statements under applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "budget", "goal", "objective", "possible", "probable", "projected", scheduled", or state that certain actions, events or results "may", "could", should", "would," "might", or "will" be taken, occur or be achieved, or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements or information in this news release include, but are not limited to:

• the anticipated closing of transactions to sell certain of Trilogy's assets in its Kaybob Duvernay play and in the Grande Prairie area, the timing thereof and the use of proceeds therefrom;
• the estimated reserves to be divested in the Kaybob Duvernay asset sale and statements as to the prospectivity of Trilogy's remaining Duvernay acreage;
• the expected impact of these dispositions on Trilogy's borrowing base under its revolving credit facility and the resulting proforma drawings and capacity thereunder;
• forecast 2017 annual production levels; and
• other statements regarding the Company's business strategy and objectives.

Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. In addition to other assumptions identified in this document, assumptions have been made regarding, among other things:

• the likelihood that the previously mentioned Kaybob Duvernay and Grande Prairie asset dispositions will close as planned;
• future crude oil, natural gas, condensate, NGLs and other commodity pricing and supply;
• funds flow from operations and cash flow consistent with expectations;
• current reserves estimates;
• credit facility availability and access to sources of funding for Trilogy's planned operations and expenditures;
• the ability of Trilogy to service and repay its debt when due;
• current production forecasts and the relative mix of crude oil, natural gas and NGLs therein;
• geology applicable to Trilogy's land holdings;
• the extent and development potential of Trilogy's assets;
• the ability of Trilogy and its industry partners to obtain drilling and operational results, improvements and efficiencies consistent with expectations (including in respect of anticipated production volumes, reserves additions and NGL yields);
• well economics;
• decline rates;
• foreign currency, exchange and interest rates;
• royalty rates, taxes and capital, operating, general & administrative and other costs and expenses;
• assumptions regarding royalties and expenses and the applicability and continuity of royalty regimes and government incentive programs to Trilogy's operations;
• general business, economic, industry and market conditions;
• projected capital investment levels and the successful and timely implementation of capital projects;
• anticipated timelines and budgets being met in respect of drilling programs and other operations;
• the ability of Trilogy to obtain equipment, services, supplies and personnel in a timely manner and at an acceptable cost to carry out its evaluations and activities;
• the ability of Trilogy to secure adequate product processing, transportation, fractionation and storage capacity on acceptable terms or at all and assumptions regarding the timing and costs of run-times, outages and turnarounds;
• the ability of Trilogy to market its oil, natural gas, condensate, other NGLs and other products successfully to current and new customers;
• expectation that counterparties will fulfill their obligations under operating, processing, marketing and midstream agreements;
• the timely receipt of required regulatory approvals;
• the continuation of assumed tax regimes, estimates and projections in respect of the application of tax laws and estimates of deferred tax amounts, tax assets and tax pools; and
• the extent of Trilogy's liabilities.

Although Trilogy believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Trilogy can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by Trilogy and described in the forward-looking statements or information. These risks and uncertainties include but are not limited to:

• The possibility that the Kaybob Duvernay and Grande Prairie area assets dispositions will not close when expected or at all;
• fluctuations in crude oil, natural gas, condensate and other natural gas liquids and commodity prices;
• the ability to generate sufficient funds flow from operations and obtain financing on acceptable terms to fund planned exploration, development, construction and operational activities and to meet current and future obligations ;
• uncertainties as to the availability and cost of financing;
• Trilogy's ability to satisfy maintenance covenants within its credit and debt arrangements;
• the risk and effect of a downgrade in Trilogy's credit rating;
• fluctuations in foreign currency, exchange rates and interest rates;
• the risks of the oil and gas industry, such as operational risks in exploring for, developing and producing crude oil, natural gas, condensate and other natural gas liquids, and market demand;
• risks and uncertainties involving the geology of oil and gas;
• the uncertainty of reserves estimates and reserves life;
• the uncertainty of estimates and projections relating to future production and NG yields as well as costs and expenses;
• the ability of Trilogy to add production and reserves through development and exploration activities and acquisitions;
• Trilogy's ability to secure adequate product processing, transmission, transportation, fractionation and storage capacity on acceptable terms and on a timely basis or at all;
• potential disruptions or unexpected technical difficulties in designing, developing, or operating new, expanded, or existing pipelines or facilities (including third party operated pipelines and facilities);
• risks inherent in Trilogy's marketing operations, including credit and other financing risks and the risk that Trilogy may not be able to enter into arrangements for the sale of its sales volumes;
• volatile business, economic and market conditions;
• general risks related to strategic and capital allocation decisions, including potential delays or changes in plans with respect to exploration or development projects or capital expenditures and Trilogy's ability to react to same;
• availability of equipment, goods, services and personnel in a timely manner and at an acceptable cost;
• health, safety, security and environmental risks;
• the timing and cost of future abandonment and reclamation obligations and potential liabilities for environmental damage and contamination;
• risks and costs associated with environmental, regulatory and compliance, including those potentially associated with hydraulic fracturing, greenhouse gases and "climate change" and the cost to Trilogy in order to comply with same;
• weather conditions;
• the possibility that government policies, regulations or laws may change, including risks related to the imposition of moratoriums;
• the possibility that regulatory approvals may be delayed or withheld;
• risks associated with Trilogy's ability to enter into and maintain leases and licenses;
• uncertainty with regard to royalty payments and the applicability of and changes to royalty regimes and incentive programs including, without limitation, applicable royalty incentive regimes and the Modernized Royalty Framework, the Emerging Resources Program and the Enhanced Hydrocarbon Recovery Program, among others;
• imprecision in estimates of product sales, commodity prices, capital expenditures, tax pools, tax deductions available to Trilogy, changes to and the interpretation of tax legislation and regulations;
• uncertainty regarding results of objections to Trilogy's exploration and development plans by third party industry participants, aboriginal and local populations and other stakeholders;
• risks associated with existing and potential lawsuits, regulatory actions, audits and assessments;
• changes in land values paid by industry;
• risks associated with Trilogy's mitigation strategies including insurance and hedging activities;
• risks related to the actions and financial circumstances of Trilogy agents and contractors, counterparties and joint venture partners, including renegotiation of contracts;
• risks relating to cybersecurity, vandalism, and terrorism;
• the ability of management to execute its business plan; and

other risks and uncertainties described elsewhere in this document and in Trilogy's other filings with Canadian securities authorities, including its Annual Information Form.

The forward-looking statements and information contained in this news release are made as of the date hereof and Trilogy undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Oil and Gas Advisory

This document contains disclosure expressed as "Boe/d" and "MBoe ". All oil and natural gas equivalency volumes have been derived using the ratio of six thousand cubic feet of natural gas to one barrel of oil (6:1). Equivalency measures may be misleading, particularly if used in isolation. A conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head. For Q1 2017, the ratio between Trilogy's average realized oil price and the average realized natural gas price was approximately 20:1 ("Value Ratio"). The Value Ratio is obtained using the Q1 2017 average realized oil price of $61.36 (CAD$/Bbl) and the Q1 2017 average realized natural gas price of $3.09 (CAD$/Mcf).This Value Ratio is significantly different from the energy equivalency ratio of 6:1 and using a 6:1 ratio would be misleading as an indication of value.

All reserves information in this News Release is gross reserves. Gross reserves means Trilogy's working interest (operating or non-operating) share before deduction of royalties and without including any royalty interest of Trilogy. Reserves estimates are based on the independent engineering evaluation prepared by McDaniel & Associates Consultants Ltd. dated March 7, 2017, evaluating Trilogy's crude oil, natural gas and natural gas liquids reserves effective as of December 31, 2016.