Canadian company Lycos Energy Inc. has entered into a definitive agreement to sell certain oil assets located in the Lindbergh, Moose Lake and Fishing Lake areas of Alberta for a total of $60mn, subject to customary closing adjustments. The deal, announced on October 7, is part of a strategy aimed at optimising shareholder value following the company’s previously announced strategic review.
Proceeds of the sale to be redistributed
Of the expected net proceeds from the transaction, approximately $47.9mn will be returned to Lycos Energy shareholders as a special dividend. The payment will be structured as a capital return, equal to $0.90 per common share. The remaining funds will be allocated in part to debt repayment, with $9mn targeted to reduce net debt to below $1mn by the fourth quarter.
The divested assets were producing around 940 barrels of crude oil per day and included 21 booked drilling locations. As of December 31, 2024, proved developed producing reserves were evaluated at 395 Mbbl. The transaction reflects a 3.4 times multiple on annualised net operating income and a unit price of $63,830 per barrel of oil equivalent.
Post-sale structure and financing capacity
Following the transaction, Lycos will maintain production of 1,700 barrels of oil equivalent per day, 97% of which is crude oil, across the Swimming, Wildmere and Viking Kinsella sites in Central Alberta. The company will retain its $50mn credit facility unchanged, ensuring flexibility for targeted acquisitions or organic development.
In parallel, Lycos has received conditional approval from the TSX Venture Exchange (TSX-V) to initiate a normal course issuer bid, allowing the repurchase of up to 4,661,208 common shares, representing 10% of its public float. The programme will begin on November 3 and conclude no later than November 2, 2026.
Automatic share purchase plan entrusted to NBF
Lycos has signed an automatic share purchase plan with its designated broker, National Bank Financial Inc., to enable repurchases even during regulatory restriction periods or internal blackout windows. These purchases will be executed at market prices in accordance with applicable regulations, with no shares repurchased in the past 12 months.
The company views this programme as a strategic option to enhance share value when trading prices do not reflect the business’s underlying worth. Management retains discretion over the timing and volume of each transaction, subject to authorised limits.
