Press Release re: New Cache purchase by Abraxas: (generally GWX takes 10-20% of Abraxas deals - note in this case they want to find a way to take 50% of this transaction - don't quite know how this can be done at this stage - it is a big meal - there must be some attractive synergies somewhere?) I guess we have to hang on for the ride
D. A. Engle, President of Grey Wolf Exploration Inc. announces that its managed affiliate, Canadian Abraxas Petroleum Ltd., has agreed to acquire all of the issued and outstanding shares of New Cache Petroleums Ltd. for cash consideration of $6.50 per share. Including assumption of bank debt totaling approximately $36 million, the total value of this transaction is $128 million. The Board of Directors of New Cache has unanimously approved the proposed transaction and has also unanimously resolved to recommend that shareholders accept this offer. Directors and Officers have tendered their approximate 20% of the outstanding shares to this Offer.
It is anticipated that the Offer to Shareholders of New Cache will be mailed as soon as possible, but no later than November 27, 1998. The offer is conditional upon a minimum of 66 2/3% of New Cache shares being tendered.
New Cache's estimated current production levels are 30 MMCF per day and 1600 barrels of oil and liquids per day. An independent engineering evaluation placed reserves (Proved plus 1/2 Probable) as of September 1, 1998 at 110 BCF and 6,360,000 barrels of oil and liquids. In addition, there are 230,000 net acres of undeveloped lands plus over 5,200 km of seismic data which provide an excellent base for exploration and development.
Grey Wolf jointly participates with Canadian Abraxas in all of its petroleum and natural gas activities and is currently exploring alternatives that will allow it to participate for up to 50% of this transaction. TEL: (403) 262-1949 D. A. Engle, President FAX: (403) 262-1969 S. Blair Patrick, Vice President Finance
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