Compton Petroleum can get back to the business of finding oil and gas, after ringing in the New Year with the final stage of a debt repayment scheme.
Compton announced early Monday that it will complete the final stage of a $95-million royalty agreement struck last year - the plan was contingent on Compton's partner in the deal obtaining funding.
While Compton never disclosed who bought the royalty on its production, sources in the oil patch say former Pengrowth CEO Jim Kinnear helped de-leverage the company by purchasing the position.
Mr. Kinnear backs a three-person private company called Kinnear Financial, which is in turn affiliated with a financing concern called Caledonian Royalty Corp. Sources say Caledonian was on the other side of the royalty deal that helped rebuild Compton's balance sheet.
Scotia Capital worked with Compton.
With this deal now papered, Compton has lowered its debt by $245-million over the last 12 months, and the company starts 2010 with just $105-million of debt.
"We now have a stronger financial footing to carry out our 2010 budget and operating plans, which represents an increased drilling and capital program," said Tim Granger, Compton's recently-named president and CEO.
Debt has weighed heavily on Compton for several years. The company was put up for sale in 2008, but found no buyers.