News out today:
newswire.ca
BSX. (TSE)
Attention Business Editors:
Black Sea Energy and Sunwing Energy approve merger; new company to be named Ivanhoe Energy; veteran oil executive Leon Daniel named President and CEO
CALGARY, May 20 /CNW/ - David Martin, Chairman of Black Sea Energy Ltd.,and Patrick Chua, Co-Chairman of Sunwing Energy Ltd., jointly announced today that their respective boards of directors have formally approved the merger of the two companies.
Black Sea and Sunwing will seek the approval of shareholders at special meetings scheduled for June 22. The merger, if approved by shareholders, is
expected to be implemented by the end of June, following court approval.
Ivanhoe Energy Inc. will be the name of the new entity resulting from the
merger, subject to all necessary approvals. It will integrate the operations
of the two predecessor companies under a unified corporate organization that
will include three operating divisions - the United States, Russia and China -
with significant interests in established oilfields. One of two China projects
in the new company's portfolio will include development rights to a
22,400-acre area of the Dagang oilfield. This area already contains 25 wells
that produce intermittently and are slated for workovers beginning this summer
to increase production and reserves. In addition, the new company's share of
production from a joint venture on Russia's Kalchinskoye oilfield will be
nearly 6,000 barrels of oil a day.
The Black Sea board of directors has approved the appointment of Leon
Daniel as President and Chief Executive Officer of Ivanhoe Energy, effective
upon completion of the merger. Mr. Daniel, a petroleum engineer, joined the
Black Sea board in August, 1998, after a distinguished, 29-year career with
Occidental Oil and Gas Corp. during which he managed the development of
several major projects in some of the world's principal oil-producing regions.
A specialist in enhanced oil recovery techniques, Mr. Daniel successfully
led Oxy's acquisition and implementation of the large Idd El Shargi North and
South Dome Projects in the Arabian Gulf state of Qatar, as well as other major
enhanced recovery projects in Venezuela, Russia and the U.S. With worldwide
responsibilities as Executive Vice-President for Engineering, Drilling and
Production, he guided the development of Oxy's Cano Limon oilfield in Colombia
and the construction of a 500-mile pipeline across the Andes mountains, and
previously headed the development of oilfields in Libya and the North Sea.
Under the Black Sea-Sunwing merger arrangement, each Sunwing shareholder
will receive one Black Sea Energy share in exchange for 4.64 Sunwing shares.
Black Sea will issue approximately 17.6 million shares. Black Sea is a public
company whose common shares trade on the Toronto Stock Exchange under the
symbol BSX; Sunwing is a privately-held company. The shares of Ivanhoe Energy
will continue to trade on the TSE, under the symbol IE, upon receipt of all
necessary approvals.
Mr. Martin said that an integrated organization under the Ivanhoe Energy
banner will provide an enhanced, cost-efficient environment for direction of
international projects, financial planning and corporate administration, and
optimum utilization of professional resources.
''Sunwing's projects in China will be an outstanding addition to Black
Sea's existing projects in California and Russia,'' Mr. Martin said. ''The
combined portfolio will create a solid base upon which to launch Ivanhoe
Energy as a global player in the sector.''
Mr. Martin noted that Sunwing's oil projects are in the heart of two of
the largest oil-producing regions in China, with proven reserves, modern
infrastructure and ready markets. ''Patrick Chua and his team at Sunwing have
established excellent working relationships in China that have led to
production-sharing contracts with China National Petroleum Corporation.''
At Dagang, development work to increase production and reserves will
begin immediately after the merger. The program for the remainder of 1999 will
include the drilling of new wells and additional workovers and recompletion on
existing producing wells to enable production from new oil zones. It was
announced last week that Nippon Oil Exploration Limited, a leading Japanese
exploration and production company, has agreed to join the project on the
Dagang field by acquiring 10% of the stake that will be held by Ivanhoe
Energy.
While Black Sea is actively considering new business opportunities in
established oil production centres, Mr. Martin said that the company already
has demonstrated its production capabilities by achieving outstanding
technical successes at its Russian projects. ''Although the ventures in Russia
are still hampered by political uncertainties and domestic legal issues, we
are confident that we can duplicate these technical successes at our combined
projects in California and China to create significant growth for the new
Ivanhoe Energy company.''
In California, Black Sea is embarking on an extensive exploration program
in the southern San Joaquin Valley. The region is one of the most prolific
oil-producing areas in the USA, and is the scene of very recent deep-gas
exploration activity. Black Sea is in the process of developing several
deep-gas plays in the area. Black Sea also has just concluded drilling, and is
currently testing, its second shallow well in the northern extension of the
Lost Hills field, approximately 45 miles northwest of Bakersfield.
Regards, t.
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