FINANCING / Search Energy
SEARCH ENERGY CORP.
CALGARY, May 26 /CNW/ - SEARCH ENERGY CORP. (TSE - ''SGY'') is pleased to
report that it has closed the first tranche of its recently announced unit
offering for gross proceeds of $3.25 million ($3.0875 million net). A total of
3,155,340 units were sold at a price of $1.03 per unit to Nova Bancorp Oil and
Gas Strategic Limited Partnership. Each unit consists of one flow-through
share, with qualifying expenditures to be renounced to the shareholder as 75%
CEE and 25% CDE for the 1998 taxation year, and 3/4 of one common share
purchase warrant. A whole warrant will have a term of 18 months and have an
exercise price of $1.16. Both the flow-through shares and the shares purchased
through the exercise of warrants are restricted from trading until May 18,
2000.
After this offering Search will have 31,259,206 shares issued and
outstanding.
The Unit Subscription Agreement provides for a second tranche financing
to the same purchaser, also for $3.25 million ($3.0875 million net) that will
close on November 30, 1998. The unit price for the second tranche will be
established based on 1.33 times the twenty day weighted average of the trading
price of Search shares on the TSE prior to the November 30, 1998 closing with
the warrant priced at 1.5 times the same weighted average price. The warrants
issued at the second tranche closing will also have a term of 18 months. Both
the flow-through shares and the shares purchased through the exercise of
warrants pursuant to the second tranche will be restricted from trading for
two years after the second tranche closing.
The second tranche is to be secured by letter of credit to be put in
place by June 15, 1998.
The completion of this financing secures Search's capital expenditure
program for 1998 of $12.3 million consisting of 23 wells (16.7 net) in the
Company's core areas in Manitoba, Saskatchewan and Alberta.
Search is currently producing approximately 1200 bopd and 7 mmcfd which
is expected to rise to 1500 bopd and 9 mmcfd by the end of the second quarter
as recent successful completions are brought into production.
Search is a growth oriented Canadian junior oil and gas company engaged
in exploration, acquisition and production of crude oil and natural gas
reserves in Alberta, Saskatchewan and Manitoba.
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For further information: Mr. William T. Davis, President & Chief
Executive officer, or Mr. Jeffrey P. Jongmans, Chief Financial Officer, (403)
261-8810, Fax: (403) 262-0723, Website: www.searchenergy.com
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