Argosy Energy Inc. Announces Amendments to Its Credit Facility and Provides Results of Its December 31, 2012 Reserve Evaluation

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CALGARY, ALBERTA--(Marketwire - Feb 26, 2013) - Argosy Energy Inc. ("Argosy" or the "Company") (GSY.TO) announces that it has signed an amendment to its existing credit facility ("Credit Facility") whereby the Company''s lender has agreed to extend the revolving period of the Credit Facility to April 30, 2013 subject to certain term and conditions including the following:

  • Elimination of the acquisition/development line of $4,000,000 (undrawn).
  • Requirement to monetize the existing gas hedge.
  • Requirement to engage Sayer Energy Advisors as the Company''s sales and marketing agent to pursue a sale of all of its property and assets.
  • Requirement that all of the proceeds from any sale of or disposition of any of the Company''s petroleum and natural gas assets whether under and pursuant to the Sayer sales process or otherwise, shall be used to permanently repay amounts owed to the lender.
  • Closing of a transaction of purchase and sale on or before April 30, 2013.
  • Repayment in full of all indebtedness to the lender on or before April 30, 2013.
  • Amendment fees and monthly extension fees payable to the lender.

The Company continues to be in breach of the working capital provision of its Credit Facility as it was at June 30 and September 30, 2012. Current outstanding amounts under the operating facility are approximately $22 million. Argosy continues to work with the lender to provide an optimal solution for all parties. The Company can give no assurance that the Credit Facility will be repaid from the proceeds of sale or any of the strategic alternatives that it is pursuing.

Argosy Energy Inc. has been provided the results of its independent reserve evaluation prepared by GLJ Petroleum Consultants (GLJ) as at December 31, 2012. The reserve evaluation is compliant with National Instrument 51-101 and forecast prices used in the evaluation are based on GLJ''s January 2013 price forecast.

All future net revenues are stated prior to provision for interest, general and administrative expenses and after deduction of royalties and estimated future capital expenditures. Future net revenues have been presented on a before tax basis. Estimated values of future net revenue disclosed herein do not represent fair market value.

It should not be assumed that the present worth of estimated future cash flow presented in the tables below represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. The recovery and reserve estimates of Argosy''s crude oil and natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas reserves may be greater than or less than the estimates provided herein.

Additional information with respect to the Company''s reserves will be included in the Company''s Annual Information Form which is expected to be filed on SEDAR.

SUMMARY OF OIL AND GAS RESERVES AS AT DECEMBER 31, 2012

Argosy "Gross" reserves include operated and non-operated reserves before deductions of royalties and excluding royalty interests.

(Note values represented in the following tables may not add due to rounding)

Gross Reserves Total Crude Oil
(Mbbl
 
)
Nat. Gas Liquids
(Mbbl
 
)
Natural Gas
(MMcf
 
)
Total Boe
(Mboe
 
)
Proven Producing 61   71   3,960   792  
Total Proved 159   76   4,235   941  
Probable 1,993   81   3,935   2,730  
Total Proved +Probable 2,152   158   8,170   3,671  

Argosy "Net" reserves include operated and non-operated reserves after royalty deductions and include royalty interests.

Net Reserves  Total Crude Oil
(Mbbl
 
)
Nat. Gas Liquids
(Mbbl
 
)
Natural Gas
(MMcf
 
)
Total Boe
(Mboe
 
)
Proven Producing 56   47   3,539   693  
Total Proved 136   50   3,788   818  
Probable 1,696   58   3,543   2,344  
Total Proved +Probable 1,832   108   7,331   3,162  
   
SUMMARY OF NET PRESENT VALUES OF FUTURE REVENUE AS AT DECEMBER 31, 2012.  
   
Reserve Category 0% NPV ($M ) 5% NPV ($M ) 10% NPV ($M )
             
Proven Producing 13,030   10,266   8,493  
Future Development Capital 0   0   0  
             
Total Proved 17,038   13,218   10,787  
Future Development Capital 707   618   544  
             
Proved + Probable 81,334   35,055   16,722  
Future Development Capital 63,434   56,041   50,112  
   
RESERVES RECONCILIATION AS AT DECEMBER 31, 2012.  
   
  Total Crude Oil   Nat. Gas Liquids   Natural Gas   Total BOE  
Proved (Mbbl ) (Mbbl ) (MMcf ) (Mboe )
Opening Balance Dec. 31/11 367   204   9,874   2216  
Extensions 46   0   0   46  
Technical revisions -30   -17   -1820   -350  
Dispositions -199   -90   -2693   -738  
Economic Factors 0   -6   -342   -63  
Production -26   -14   -784   -170  
Dec. 31/12 159   76   4235   941  
                 
  Total Crude Oil   Nat. Gas Liquids   Natural Gas   Total BOE  
Proved + Probable (Mbbl ) (Mbbl ) (MMcf ) (Mboe )
Opening Balance Dec. 31/11 527   345   16639   3645  
Extensions 70   0   0   70  
Infill Drilling 1900   0   0   1900  
Technical revisions -56   -28   -3029   -589  
Dispositions -260   -134   -3938   -1050  
Economic Factors -4   -11   -718   -135  
Production -26   -14   -784   -170  
Dec. 31/12 2152   158   8170   3671  

ABOUT ARGOSY ENERGY INC.

Argosy is a junior oil and gas company focused on the exploration for and development of oil and natural gas in western Canada. The Company presently has approximately 420 boe/d of primarily natural gas production and has a 100% working interest in a 34 section land position which includes a well developed portion of the Alberta Bakken prospect trend. At September 30, 2012 the Company had combined tax pools totaling approximately $61 million.

Advisory Regarding Forward-Looking Information

This press release contains forward-looking information concerning including but not limited to the Company''s banking arrangements. Although Argosy believes that the expectations reflected in the forward-looking statements are reasonable, the forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. As such, readers are cautioned not to place undue reliance on the forward-looking information, as no assurance can be provided as to the future results, levels of activity or achievements. Risks include, but are not limited to: uncertainties and other factors that are beyond the control of the Company, risks associated with the oil and gas industry, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve obligation to update any forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements unless and until required by securities laws applicable to the Corporation. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Additional information identifying risks and uncertainties is contained in the Company''s Annual Information Form as well as other filings of the Company with Canadian securities regulators, which filings are available under the Corporation''s profile at www.sedar.com.

Contact:
Argosy Energy Inc.
Mr. Peter Salamon
President and CEO
(403) 269-8846
Argosy Energy Inc.
500, 1414 - 8th Street S.W.
Calgary, Alberta
investor@argosyenergy.com
www.argosyenergy.com

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