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Shoreline tumbles on lower Q4 cash flow, bigger net loss; terminates merger deal

Published: 15:00 01 Apr 2014 BST

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Shoreline Energy Corp. (TSE:SEQ), which is focused on the Western Canadian Sedimentary Basin, plummeted in morning trading after saying cash flow dropped 79 percent and net loss expanded more than three times in the fourth quarter. It also terminated proposed merger with Lilis Energy Inc. (OTCBB:RECV).

The shares fell as much as 21 percent before paring losses to C$1.50, down 13 percent, at 9:34 a.m. in Toronto.

Funds from operations shrank to C$433,000, or 5 Canadian cents per share, in the three months ended Dec. 31, from C$2 million, or 36 Canadian cents per share, in the year-earlier period, the Calgary, Alberta–based company said in a statement today.

Net loss expanded more than three times to C$3.6 million, or 42 Canadian cents per share, from C$1 million, or 18 Canadian cents per share.

Revenue slid 3 percent to C$5.5 million from C$5.7 million.

Total production improved 16 percent to 1,695 barrels of oil equivalent per day, or boe/d in the fourth quarter, from 1,459 boe/d a year earlier.

Average realized prices for oil and NGLs declined 9 percent to $70.36 per barrel, from $76.95 per barrel.

Total proved-plus-probable reserves increased 9.2 percent to 7.96 million boe as at Dec. 31, 2013, from 7.28 million boe a year earlier.

Separately, Shoreline said that the merger deal with Lilis Energy Inc. (OTCBB:RECV) has been terminated by both parties.

Shoreline said it rejected Lilis's amended offer which included a" substantial reduction in purchase price."

Shoreline said in a statement it will immediately start consideration of strategic and financial alternatives available to the company with the ultimate view of maximizing shareholder value.  

Strategic and financial alternatives may include, but are not limited to, the sale of the Company, merger or other business combination, it said.

Shoreline believes there is a disconnect between the company's recent trading range and its reserves valued over $100 million dollars.

The board has concluded that any dividends that may become payable will be suspended until the completion of the review.

 

 

 

 

 

 

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