Corex Resources Ltd. Announces Special Distribution to Shareholders by Way of Return of Capital

CALGARY, AB, Nov. 18, 2021 /CNW/ - Corex Resources Ltd. ("Corex" or the "Company") is pleased to announce that it will pay a special distribution to shareholders by way of return of capital, in the amount of $0.43 per Corex common share (the "Common Shares"), for a total distribution amount of approximately $20 million, which distribution will be payable on November 30, 2021, to holders of Common Shares of record as of November 25, 2021.

At the Corex Annual and Special Meeting held on May 27, 2021, Corex shareholders approved the reduction of the stated capital of the Common Shares for the purpose of the Company making distributions to shareholders of Common Shares by way of return of capital prior to December 31, 2021.

About Corex

Corex is a private Calgary based junior oil and natural gas company focused on building shareholder value through development drilling opportunities and pursuit of quality, complementary farm-in opportunities, accretive acquisitions, and internally generated exploration opportunities. Corex is primarily focused on cost effective, high netback, large light oil in place opportunities in Manitoba, Canada.

As at October 31, 2021, the Company's production was approximately 7,200 boe/d. For the quarter ended June 30, 2021, Corex realized $47.44/boe operating netbacks, $35.79/boe corporate netbacks, funds flow from operations of $22.3 million and free funds flow of $17.4 million. As at June 30, 2021, the Company's net debt was $67.7 million, with net debt expected to be approximately $97 million as at December 31, 2021, inclusive of the distribution of $20 million to shareholders under the return of capital.

The Company is currently executing on a one rig drilling program and expects to drill an aggregate of 56 gross wells in 2021. The Company expects calendar 2021 exit production to be between 7,500 - 7,800 boe/d.

Advisories

Non-GAAP Terms

In this news release, Corex uses the terms "net debt", "funds flow from operations", and "free funds flow" as indicators of Corex' financial position. These financial measures ("Non-GAAP Measures") do not have any standardized meaning prescribed by International Financial Reporting Standards ("IFRS").

• "Net debt" is calculated as current liabilities (excluding lease liabilities, and fair value of financial instruments) and bank debt less current assets, excluding loan receivable
  
  
• "Funds flow from operations" is calculated as all of Corex' cash generated (used in) from operating activities before changes in non-cash working capital.
  
  
• "Free funds flow" is determined by funds flow from operations mid-point less lease payments, abandonment and reclamation expenditures and capital expenditures.

Readers should be cautioned that Non-GAAP Measures should not be construed as an alternative to their most comparable measures calculated in accordance with IFRS or other measures of financial performance calculated in accordance with IFRS. Corex' method of calculating these measures may differ from other companies, and accordingly, they may not be comparable to similar measures used by other companies.

Oil & Gas Matters Advisory

The term "Boe" means a barrel of oil equivalent on the basis of 6 thousand cubic feet ("Mcf") of natural gas to 1 bbl. The term "boe/d" means the number of Boe produced per day.  Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6 Mcf: 1Bbl, utilizing a conversion ratio at 6 Mcf: 1 Bbl may be misleading as an indication of value.

This news release contains a number of oil and gas metrics, including "corporate netbacks" and "operating netbacks".

• "operating netbacks" is calculated as Corex' oil and gas revenues, less royalties and operating and transportation expenses, divided by the Boe production of Corex.
  
  
• "corporate netbacks" is calculated by starting with the operating netback and further deducting the cash portions of general and administrative expenses, realized losses on financial contracts, finance expenses and exploration and evaluation expenses and then adding other income and realized gains on financial contracts, divided by the boe production of Corex.

These oil and gas metrics have been prepared by Corex and do not have a standardized meaning or standard method of calculation and therefore such measures may not be comparable to similar measures used by other companies and should not be used to make comparisons.  Such measures are not reliable indicators of the future performance of Corex and future performance may not compare to performance in previous periods and therefore such metrics should not be unduly relied upon.

Advisory on Forward-Looking Statements

Certain information regarding Corex set forth in this news release contains forward-looking statements within the meaning of applicable securities law. The use of any of the words "expect", "intend", "objective", "ongoing", "believe", "should", "anticipate", "estimate", "forecast" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking information or statements. Such statements represent Corex' internal projections, estimates or beliefs concerning, among other things, future growth, changing global economic conditions, public health crises, such as the COVID-19 pandemic, and any related actions taken by business and governments, results of operations, production, the cost and competition for services throughout the oil and gas industry, the continuance of existing tax, royalty and regulatory regimes, certain commodity price and other assumptions and the continued access to capital to fund planned expenditures. Corex believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable, but many factors could cause Corex' actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Corex.

In particular, but without limiting the foregoing, this news release contains forward-looking statements regarding the timing of the return of capital payment to Corex' shareholders, expectations as to the number of wells to be drilled in 2021 and the number to be completed prior to yearend, exit 2021 production and the expected net debt of Corex at year end 2021.

Although the forward-looking statements contained in this news release are based upon assumptions which Corex believes to be reasonable, the forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon.

Corex has included the above summary of assumptions and risks related to forward-looking information provided in this news release in order to provide readers with a more complete perspective on Corex' current and future operations and such information may not be appropriate for other purposes. Corex' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits Corex will derive. These forward-looking statements are made as of the date of this news release and Corex disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise.

Return of Capital Advisory

For additional information regarding the return of capital Corex shareholders should refer to the Information Circular dated April 30, 2021 distributed to shareholders in connection with the Corex shareholder meeting held on May 27, 2021.  Shareholders should obtain advice from their own independent tax advisors with respect to their particular tax position, as tax consequences of such a distribution can vary depending upon the particular circumstances of each shareholder.

Future Oriented Financial Information

This news release contains Future Oriented Financial Information ("FOFI") within the meaning of applicable securities laws, in particular Corex' expected net debt as at December 31, 2021. The FOFI has been prepared based on a number of assumptions including the assumptions discussed under the heading "Forward-Looking Statements", including assumptions with respect to costs and expenditures to be incurred by the Company, operating results, operating costs, taxation rates for the Company, general and administrative expenses and prices to be paid for the Company's production. Although Corex believes that the FOFI has been prepared on a reasonable basis, reflecting Corex' best estimates and judgments, readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise. Corex' actual results, performance or achievement could differ materially from those expressed in, or implied by, such FOFI. This information is highly subjective and subject to numerous risks including the risks discussed under the heading "Forward-Looking Statements".  Given these factors, this information should not be relied on as necessarily indicative of future results.  Corex disclaims any intention or obligation to update or revise any FOFI statements, whether as a result of new information, future events or otherwise, except as required by law.

No Obligation to Disclose or Update

Corex is not a reporting issuer pursuant to Canadian securities laws and as such is not subject to an obligation to publicly disclose any information respecting its business, operations, financial condition or otherwise.  Corex has no duty or intention to update the information in this news release nor publicly disclose, in the future, any additional information regarding the Company, and readers should not expect Corex to provide any such updates or additional information.

SOURCE Corex Resources Ltd.

Monty Bowers, President & CEO, T: [phone], E: [email protected]; Brenda Mawhinney, Vice President Finance & CFO, T: [phone], E: [email protected]