FINANCING / Purcell Energy announces Special Warrants Qualified
CALGARY, March 16 /CNW/ - Purcell Energy Ltd. announces that it has
received final receipts from the Alberta, Ontario and Saskatchewan securities
commissions for its prospectus qualifying 7,000,000 common shares issuable in
exchange for outstanding special warrants. As announced previously, 6,000,000
special warrants were issued pursuant to private placements on November 19,
1997 and 1,000,000 special warrants were issued on November 3, 1997 on a tax
flow-through basis pursuant to a private placement agreement dated July 25,
1997. Aggregate proceeds of $10,250,000 from the private placements were
previously received by the Corporation. After exchange of the special
warrants for common shares, Purcell will have 21,022,540 common shares issued
and outstanding.
Net proceeds from the financings were used initially to reduce bank
indebtedness and, subsequently, to fund land purchases, exploration activity
and development programs carried out in the fourth quarter of 1997 and the
first quarter of 1998. The Corporation has set a $13 million capital
expenditures budget for 1998, which is a reduction, primarily due to lower oil
prices, from the estimated budget of $15 to $20 million announced previously.
Capital expenditures in 1998 have been allocated between $5 million for
drilling, $1.5 million for completions and tie-ins, $1.5 for construction of
facilities, $3.8 million for property acquisitions, $0.7 million for seismic
programs, and $0.5 million for land purchases. These expenditures are
anticipated to be funded as to approximately $3 million from proceeds of the
financings, approximately $5 million from cash flow from operations and
approximately $5 million from bank debt.
Purcell's current production is approximately 1400 BOE/d, which is double
production levels at this time last year. Production is expected to reach
1500 BOE/d by the end of April, 1998, of which approximately 45% will be gas
production. The Corporation plans to drill at least 35 gross (16 net) wells
in 1998 in order to achieve an exit 1998 production target of 1900 BOE/d.
Terry L. Lindquist, C.A., has been appointed Chief Financial Officer of
Purcell. Mr. Lindquist was previously Controller, a position he held since
September, 1994.
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