Brian,
It's not the pipeline gathering system Ris is buying(and its 50% they paid 4 million U.S. and they already own it) it's the gas processing plant. $109 million U.S. is no small sum of money for a company like this and if the banks think it's a good deal for RIS so do I. A bank or Financial insitute will not lend that kind of money if it's not a good investment. Who do you think Ultra will let transport and Process all it's gas if Ris gets this deal? We will have to wait and see about this pennaco thing but I doubt these guy would invest in it if it was not a good deal. Lets not forget about the 25% of ultra Ris owns along with a much smaller float of shares.
As to all the other farm in companies who knows thats a real gamble could pay off big time then again they could find little or nothing and disapear but RIS and UP will still be around. If one of these farmins strikes the next johnah field the skys the limit but make no mistake Ris will benefit as well not just because they get to transport and process the gas but because they own 25% of UP and have a smaller share structure (UP gets 50% of whatever these farmin companies find) So I do hope Ris gets the financing for this deal we will know soon enough. Just my opinion but I feel Ris is your best bang for your buck right now in the GRB and thats the basket I keep my eggs in as far as the GRB goes.
Here's a copy of the news release you were refering to
Darko:-)
RIS completes pipeline purchase, options processing complex
RIS Resources International Corp., through its wholly owned subsidiary RIS Resources (USA) Inc., has closed on the purchase of 50% of the Bird Canyon Gathering System from Mountain Gas Resources, Inc., a subsidiary of Western Gas Resources (NYSE: WGR). This 12 inch gathering system now extends from the Bird Canyon Interconnect through Jonah field to North Lizard Head, a total of approximately 41 miles. Purchase price was based on actual construction cost and was approximately U.S. $4,000,000.
The Bird Canyon system is currently transporting 35 million cu. ft. of gas per day for producers Ultra Petroleum Corp., Anchutz Oil and Lance Oil and Gas from the Jonah Field area. Capacity of the gathering system is 60 - 70 million cu. ft. per day without compression and 110 - 120 million cu. ft. per day with compression.
RIS has also paid U.S. $1,000,000 for an option to purchase 50% of Western and Mountain's share of the Granger gas processing complex. Phase 1 of the option is a July 1, 1998 acquisition of 25% of Western's interest in the Granger complex for U.S. $59,000,000 and Phase 2 is a July 1, 1999 acquisition of an additional 25% of Western's interest for a cost of U.S. $50,000,000. The Company is currently negotiating debt based financing for this acquisition.
RIS owns approximately 25% of the issued capital of Ultra Petroleum Corp.
On behalf of the Board
John Hislop,
Director
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