FINANCING / First Star Announces Private Placement
ASE SYMBOL: FST
JANUARY 7, 1999
CALGARY, ALBERTA--First Star Energy Ltd ("First Star") announces
that it has closed the private placement of 3,194,444 flow-through
common shares at a price of $0.36 per share for total proceeds of
$1,150,000.
The proceeds from the flow-through share issue are to be expended
in 1999 on First Star's high impact exploration plays, including:
1. a Mannville exploration well at Strachan to develop the upper
zones logged but not tested in the 1998 Swan Hills discovery well;
2. a 2300 meter exploration well at Ferrybank in central Alberta
(Zeta), on a Devonian D-3 reef oil play with the potential for
over 100 million barrels of oil;
3. two other significant Devonian reef plays that are currently
being developed.
In addition, First Star is seeking approval from the Alberta Stock
Exchange to complete a further private placement on the following
terms:
1. the securities to be issued will be up to 5,000,000 units at a
price of $0.28 per Unit ($1,400,000);
2. each unit will be comprised of 1 Class "A" Common Share and
0.36 of a share purchase warrant;
3. the price allocated to each common share forming part of a unit
will be $0.2764 and the price allocated to each 0.36 warrant shall
be $0.0036;
4. the warrants will be exercisable at $0.30 until May 31, 1999,
and if fully exercised would provide $540,000 to First Star;
5. the subscribers are expected to include Tetrarch Capital
Corporation (a 100 percent investment corporation of Mr. James A.
Malcolm) and other subscribers who are not yet known and will be
determined during the course of the private placement;
6. Mr. James A. Malcolm has agreed to become a director of First
Star; and
7. the expected date of closing for the private placement is in
February 1999.
First Star has agreed that $1,325,000 of the proceeds from the
proposed private placement will be used to purchase 1/2 of the
working interests that First Star has agreed to purchase from a
joint venture partner in the Strachan Area. First Star also
proposes to assign to Tetrarch Capital (or a group put together by
Tetrarch Capital) First Star's right to acquire the other 1/2 of
these working interests. Following the acquisition of such
interests by Tetrarch Capital it is proposed that First Star will
have a call right to purchase such interests for a period of 4
months after the 2-22-38-9W5 well is placed on production, for
$425,000 and 4,375,000 shares. If the option is not exercised,
the Tetrarch Group will have a put right to require First Star to
purchase such interests for a limited period of time and for
consideration that may include cash and/or securities of First
Star. This proposed private placement is subject to ASE approval.
First Star would also like to announce the following changes to
the company management structure:
1. Mr. Robert J. Iverach, Q.C. has resigned as Chairman of the
Board of Directors but will remain as a Director of the Company.
2. Mr. James A. Malcolm has joined the Board of Directors as
Chairman effective January 5, 1999. Mr. Malcolm was the founder
and President of AccuMap EnerData Corporation. AccuMap was merged
with QC Data in March, 1998.
3. Mr. Robyn Lore has joined the management team as a Business
Consultant effective January 15, 1999. Mr. Lore has 21 years
experience in the oil and gas business, primarily as a landman and
consultant. He has been a director and officer of several
publicly listed companies including New Cache Petroleum Ltd,
Granisko Resources Ltd, Aldona Resources Ltd, and Adobe Resources
Ltd. Since September, 1997, Mr. Lore has been a consultant to
Heritage Oil Corporation, an international oil explorer.
First Star is listed on the Alberta Stock Exchange under the
symbol "FST". |
