CORP. - MERGER / Benz Energy - Calibre Energy Agreement
BENZ ANNOUNCES PUT/CALL AGREEMENT
HOUSTON, Jan. 2 /CNW/ -- Benz Energy Ltd. (Vancouver: BZG.) today
reports that it has reached agreement with the shareholders of Calibre Energy,
LLC on a put/call agreement that, in effect, would exchange 1.5 million shares
of newly issued Benz common stock for a 25% net profits interest in the
Oakvale Dome and Old Ocean properties by the end of 1998. The new put/call
agreement would directly offset, without gain or loss to the Calibre
shareholders, their put/call agreement with a fund partnership managed by
EnCap Investments L.C., the principle lender to Benz. Previously, Benz
announced an agreement, subject to shareholder and regulatory approvals, to
purchase most of the assets of Calibre for common stock and assumption of
certain liabilities.
The EnCap put/call agreement gives the Calibre shareholders the right,
subject to certain conditions, to obtain, or "call", a 25% net profits
interest in the Oakvale and Old Ocean properties in exchange for 1.5 million
shares of their existing Benz common stock. That agreement also gives EnCap
the right, subject to certain conditions, to sell, or "put," portions of the
25% net profits interest to the Calibre shareholders for amounts of Benz
common stock aggregating 1.5 million shares as of December 31, 1998, or
3.5 million shares as of March 31, 1999 if not earlier exercised or called.
Benz currently plans to drill up to five development wells at Oakvale and
one exploratory test at Old Ocean in 1998. Benz acquired interests in both
properties earlier in 1997. Oakvale is the location of Benz's K.S. Byrd #1
discovery, which continues to flow over 7 million cubic feet per day. Old
Ocean is a field along the Gulf Coast of Texas in which Benz recently
purchased, or agreed to purchase, an aggregate 50% of the deep rights. The
Old Ocean Field has produced to date from shallower depths over 4 trillion
cubic feet of gas.
This agreement is the last transaction directed at eliminating any
appearance of a conflict of interest for certain of the major shareholders of
Benz.
Benz Energy Ltd. is an exploration and development oil and gas company
based in Houston, Texas and focused on the onshore Gulf Coast of the U.S.
Benz acquires and utilizes an extensive base of 3-D seismic data and acreage
position, and has assembled an inventory of 28 leased exploration prospects.
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this release.
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