EEE Asset Sale
Piecemeal approach?
Tuesday February 27, 6:03 am Eastern Time
Press Release
Canadian 88 Energy Corp.: Asset Sale Will Result In A
Low Debt, Profitable Enterprise With Significant
Exploration Upside
CALGARY, Alberta--(BUSINESS WIRE)--Feb. 27, 2001--88 (AMEX:EEE - news; TSE:EEE. - news)
Canadian 88 Energy Corp. (AMEX:EEE - news; TSE:EEE. - news) of Calgary, Alberta announced today that it has entered into a purchase and sale agreement with Hunt Oil Company of Canada, Inc. (``Hunt Oil'') to sell the Corporation's assets in the Waterton and Caroline areas of Alberta for $176 million effective January 1, 2001.
A substantial portion of the Waterton lands and petroleum and natural gas rights are subject to a right-of-first refusal (``ROFR''). Should the ROFR be exercised and closed, the Corporation would receive the proceeds from the Waterton sale and Hunt Oil may elect not to purchase the Caroline assets for $64 million. It is expected that the ROFR process would take approximately one month.
Proceeds from a sale would be used to repay a portion of the Corporation's net debt which currently stands at approximately $195 million.
Commenting on the sale, Joseph Pritchett III stated that, ``Either of these transactions is an essential step in creating a dynamic and highly profitable enterprise focused on its core competencies and having the financial muscle to pursue existing and new opportunities. The Hunt transaction would involve a significant portion of the Corporation's non-producing reserves, resulting in an improved balance of producing and undeveloped natural gas assets while retaining significant exploration upside.''
After the Hunt transaction undeveloped exploration lands in Western Canada are comprised of approximately 460,000 net acres principally located in the highly prospective Alberta foothills including the Blackstone prospect which is currently drilling. Progress continues toward the drilling of the first well on the Corporation's acreage offshore Nova Scotia in 2002.
The Special Committee of the Board of Directors and its advisors, CIBC World Markets and Credit Suisse First Boston, are continuing the process of maximizing shareholder value.
Canadian 88 Energy Corp. (EEE) is an independent public oil and gas company with its head office in Calgary, Alberta, Canada. The shares of Canadian 88 Energy Corp. are traded on the Toronto and American Stock Exchanges. The information contained herein has neither been approved nor disapproved by the respective Exchanges. For further information please contact:
Forward-Looking Information
This release contains statements that constitute forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934 and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties including those described in our filings with Canadian and U.S. securities commissions, and that the actual results or developments may differ materially from those in the forward-looking statements as a result of various factors. We have based these
forward-looking statements on information currently available and disclaim any intention or obligation to update or revise any forward-looking statement.
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Canadian 88 Energy Corp.
700, 400-3rd Ave. S.W.
Calgary, AB T2P 4H2 |
