FIELD ACTIVITIES / Windsor Energy - MacPherson Oil Receives Approval
from California Coastal Commission to Produce at Hermosa Beach
TSE, AMEX SYMBOL: WNS
FEBRUARY 5, 1998
CALGARY, ALBERTA--Windsor Energy Corporation is pleased to
announce that the California Coastal Commission has approved the
Windsor Energy - MacPherson Oil joint venture for drilling at
Hermosa Beach.
Hermosa Beach sits on top of the Wilmington Torrance oil field
that has produced over 2.5 billion barrels of oil and is currently
producing in excess of 100,000 barrels of oil per day.
Oil was discovered under the town of Hermosa Beach in 1905 but
since 1932 no production has been permitted even though all of the
surrounding towns have been producing oil from this field. As
previously disclosed, it is estimated that there will be 30
million barrels of oil of primary recovery. After development of
the project, peak production could reach over 8,000 barrels of
light sweet crude per day. The production will be a block away
from a crude oil pipeline connection that delivers to a nearby
refinery.
The project has been carefully engineered and designed to be
environmentally safe, clean and efficient, and will use the best
available technology and equipment that exists in the world today.
As evidence of this the U.S. Department of Energy commended this
project stating that it was the type of project that the U.S.
government supports.
It is further anticipated that the royalties and other financial
commitments that Windsor Energy - MacPherson Oil have agreed to
enhance the parks and recreation facilities in the city.
Windsor is accustomed and experienced in producing in sensitive
areas in a safe and environmentally friendly manner. This is
evident from its Rincon Ventura operation, 80 miles north of
Hermosa Beach.
On January 29, 1998 Windsor announced a U.S. $170 million (Can
$248 million) agreement with Stanton Capital Corporation. An
information update follows that further clarifies the agreement.
This release contains forward-looking information. Actual future
results may differ materially. The risks, uncertainties and other
factors that could influence actual results are described in
documents filed with regulatory authorities.
INFORMATION UPDATE
February 5, 1998 - Windsor Energy Corporation wishes to provide
further information with respect to its press release of January
29, 1998 which announced an agreement with Stanton Capital
Corporation for the sale of certain of Windsor's oil and gas
assets. This transaction anticipates that an arms-length company,
Winfield Energy Corporation, will acquire all of the shares of
Windsor Corporation S.A., a 99 percent owned subsidiary of Windsor
International S.A. which in turn is 90 percent owned by Windsor
Energy Corporation. Windsor Corporation S.A. will, at closing,
hold all of the Company's assets located at Rincon, Hermosa Beach,
Louisiana and South Texas. The purchase price for the shares of
Windsor Corporation S.A. will be US$170 million (or approximately
Cdn$248 million) less repayment of outstanding bank debt and other
liabilities assumed of approximately US$18 million (or
approximately Cdn$26 million).
As part of the proposed transaction, Windsor International S.A. at
closing will subscribe for 50 percent of the common equity in
Winfield Energy Corporation for US$17.5 million (or approximately
Cdn$25.5 million). In addition, US$15 million (or approximately
Cdn$22 million) will be invested by Windsor International in
Winfield Energy Corporation in the form of preferred redeemable
shares with a term of five years and bearing dividends at 8
percent.
Windsor Energy Corporation's employees for the U.S. based
operations will also be transferred to Winfield Energy
Corporation. In turn, Winfield will provide administrative
management services for the U.S. assets retained by Windsor Energy
Corporation. This should result in decreased overhead costs for
Windsor Energy.
Windsor Energy Corporation, through Windsor Investments S.A., will
continue to hold its principal exploration assets located at
Pinnacle, California, Wyoming, East Texas, Arkansas and its 20
percent investment in Q Energy Limited, a gas exploration and
production company located in Calgary, Alberta and traded on the
Alberta Stock Exchange. It continues to hold directly a small oil
and gas property located in Saskatchewan, Canada.
Windsor Energy Corporation shareholders will benefit by having
access to the approximately US$120 million (or approximately
Cdn$175 million) directly and indirectly through its 90
percent-owned subsidiary Windsor Investment S.A. with no debt.
These funds will allow the Corporation to complete substantial
exploration and development programs on its remaining properties
and entertain new investment and property opportunities. As
importantly, Windsor International S.A. will own 50 percent of the
common equity of Winfield Energy Corporation, allowing it to
participate in the ongoing development and exploitation of the
properties being sold to Winfield Energy Corporation. It is felt
that Winfield Energy Corporation will have better access to
capital resources, enabling it to accelerate the development of
these oil and gas development properties. Windsor International
S.A. will also hold US$15 million (or approximately Cdn$22
million) preferred shares with an annual dividend of 8 percent.
In summary, upon completion of this transaction, Windsor Energy
Corporation will have, both directly and indirectly through
Windsor International S.A., the following:
- US$120 million (or approximately Cdn$175 million) in cash
- oil and gas properties in California, Wyoming (unrisked reserves
potential 253mm to 500mm BOE), East Texas (unrisked reserves
potential 20 mm BOE) and Arkansas
- approximately 20 percent of Q Energy Limited
- 50 percent of the common equity of Winfield Energy Corporation
- US$15 million (or approximately Cdn$22 million) of 8 percent
preferred shares of Winfield Energy Corporation
- no debt
This transaction is subject to, among other things, approval by
the Board of Directors of Windsor Energy Corporation of the final
terms of the transaction, approval from the Toronto Stock Exchange
and the successful completion by Winfield Energy Corporation of
the acquisition financing.
Stanton Capital Corporation is a private equity investment firm
based in New York, New York, and has completed several investments
with an aggregate transaction value exceeding U.S.$500 million
over the past two years. The financial resources of Stanton
Capital Corporation are provided by several major investment
groups based in the U.S. and Canada, which groups have total
assets exceeding U.S. $10 billion. Principals of Stanton Capital
Corporation have many years of experience in transactions
involving oil and gas exploration and production companies.
Windsor is a Calgary, Alberta, and Dallas, Texas based
international exploration and production company traded on the
Toronto Stock Exchange (TSE:WNS) and the American Stock Exchange
(AMX:WNS). There are 27,455,200 shares currently issued and
outstanding (32,874,477 shares on a fully diluted basis). |
