ASE NEW LISTING / Commonwealth Energy Corp. Reactivated
COMMONWEALTH ENERGY CORP. ANNOUNCES REACTIVATION
CALGARY, Dec. 12 /CNW/ - Commonwealth Energy Corp., formerly Szyds
Ventures Inc. until its name was changed on October 1, 1997, is pleased to
announce that it has completed, effective December 12, 1997, a series of
transactions resulting in the reactivation of the Corporation and the
relisting and posting for trading of the Corporation's common shares on The
Alberta Stock Exchange.
The common shares of the Corporation were previously delisted from
trading on The Alberta Stock Exchange on January 14, 1994, as a result of the
Corporation's failure to maintain minimum listing requirements, and were cease
traded by the Alberta Securities Commission on June 15, 1994, as a result of
the failure of the Corporation to file and mail to shareholders audited annual
and unaudited interim financial statements in accordance with provisions of
the Securities Act (Alberta) and the regulations thereunder. The Corporation
has since taken steps to bring itself in good standing with the requirements
of the Securities Act (Alberta) and with the policies of The Alberta Stock
Exchange.
On December 2, 1997, the Alberta Securities Commission issued an order
(the ''Order'') which varied Cease Trade Order No. 94/06/072 dated June 15,
1994 (the ''Cease Trade Order'') thereby permitting Commonwealth Energy Corp.
to complete the transactions described herein.
As part of the Corporation's reactivation, Robert C. Stewart, the
Secretary and a Director of the Corporation, today exercised his rights under
certain share option agreements, which he had entered into with five (5)
shareholders of Commonwealth holding an aggregate of 2,037,700 Common Shares,
so as to acquire for himself or to distribute among the new directors of the
Corporation, at an acquisition cost of $0.05 per Common Share, 2,037,700
Common Shares as follows: Robert C. Stewart, 1,244,970; Lorne Torhjelm,
464,971; Sieg Deckert, 307,759; Gordon Bradford, 10,000; and Donald Smith,
10,000. Aside from the distribution of 50,000 Common Shares from the holdings
of Robert C. Stewart pursuant to the Cross (as defined below), all of the
Common Shares acquired by the Corporation's directors and officers pursuant to
the exercise of the share option agreements; namely, 1,987,700 Common Shares,
are subject to a six-month hold period.
In order to meet the minimum listing requirements of The Alberta Stock
Exchange, Robert C. Stewart also completed a cross today of 50,000 Common
Shares from his holdings to fifty (50) new shareholders at a price of $0.10
per Common Share, with McDermid St. Lawrence Securities Ltd. acting as agent
(the ''Cross'').
The Corporation is also pleased to announce that, as part of its
reactivation, pursuant to and in accordance with share purchase agreements
dated February 28, 1997 and June 4, 1997 (the ''Blue Mountain Share Purchase
Agreements''), among the Corporation and the shareholders of Blue Mountain
Resources Inc. (''Blue Mountain''), the Corporation today acquired all of the
issued and outstanding shares in the capital stock of Blue Mountain (the
''Blue Mountain Acquisition'') by the issuance of 12,479,816 Common Shares to
the shareholders of Blue Mountain, at a deemed acquisition value of
$6,239,908. Blue Mountain is a private junior oil company with oil reserves in
the State of Oklahoma, U.S.A.
The Corporation also acquired today all of the issued and outstanding
shares in the capital stock of Commonwealth Energy (USA) Inc. (''Commonwealth
USA'') (the ''Commonwealth USA Acquisition'') pursuant to and in accordance
with certain share purchase agreements dated February 28, 1997, May 1, 1997
and June 4, 1997 (the ''Commonwealth USA Share Purchase Agreements''), among
the Corporation and the shareholders of Commonwealth USA, by the issuance of
4,334,301 Common Shares to the Commonwealth USA shareholders, for a deemed
acquisition of $2,167.150.50. Commonwealth USA is a private junior oil company
with oil reserves in the States of Wyoming and South Dakota, USA.
Upon completion of the Blue Mountain Acquisition and Commonwealth USA
Acquisition, Robert C. Stewart, Lorne Torhjelm and Sieg Deckert, all of which
are directors of the Corporation, received an aggregate of 11,865,370 Common
Shares pursuant to and in accordance with the Blue Mountain Share Purchase
Agreements and the Commonwealth USA Share Purchase Agreements. 9,865,370
Common Shares of the 11,865,370 Common Shares issued to Robert C. Stewart,
Lorne Torhjelm and Sieg Deckert, collectively, were placed in a
performance-based escrow agreement as prescribed by the rules of The Alberta
Stock Exchange (the ''Performance Escrow Agreement''). The Performance Escrow
Agreement provides that the escrowed securities will be released from escrow
on the basis of one (1) Common Share for every $0.50 of cashflow realized by
the Corporation from the oil and gas properties acquired by the Corporation
pursuant to the Blue Mountain and Commonwealth USA Acquisitions. The
remaining 2,000,000 Common Shares of the 11,865,370 Common Shares issued to
Robert C. Stewart, Lorne Torhjelm and Sieg Deckert, collectively, are subject
to a six-month hold period commencing on December 12, 1997.
Since mid-1995, Messrs. Robert C. Stewart, Lorne Torhjelm and Sieg
Deckert have made advances of approximately $298,125.84 on behalf of the
Corporation to cover administrative and office expenses, settlement of
accounts payable and other debts, filing fees associated with the
reactivation, transfer agent fees and legal and accounting fees. In
satisfaction of this debt owed to Messrs. Stewart, Torhjelm and Deckert, the
Corporation today issued 2,981,259 Common Shares at a deemed price of $0.10
per Common Share (the ''Shares for Debt Transaction''). The Common Shares
issued in the Shares for Debt Transaction are subject to a twelve-month hold
period and were distributed as follows: Robert C. Stewart, 1,117,972; Lorne
Torhjelm, 1,117,972; and Sieg Deckert, 745,315.
Commonwealth Energy Corp., as a result of the Blue Mountain Acquisition
and Commonwealth USA Acquisition, now holds interests in a number of
properties, through its wholly-owned subsidiaries, in the States of Oklahoma
and Wyoming. In Oklahoma, an oil field with 22 existing oil wells, 11 of
which are currently producing, is being placed on water flood to enhance
secondary recovery. Two new wells have been drilled and are awaiting
completion. The current production of oil is 60 BOPD (barrels of oil per day)
from existing wells. Commonwealth holds a 50% W.I. (working interest) in this
field.
In Wyoming, a number of properties are in various stages of exploration.
Commonwealth holds a 15% W.I. to 45% W.I. in approximately 22,000 acres. On
October 30, 1997, the Finley State No. 1-36 well was given a 24-hour test from
the Dakota and Lakota zones; combined the well tested at a flow rate of 1,516
BOPD and 1,146,00 cubic feet of gas. The well was cut back to a 1/4 inch choke
to conserve gas production. This resulted in average production of 650 (97.5
net) and 500 (75 net) MCF of gas. During November, right of way permits were
received and a four-mile gas pipe line was installed. Final meter loop hook
up and line test by Kansas-Nebraska Pipeline will be completed shortly.
Finley State No. 2-36 continues to produce oil at the rate of 70 BOPD. This
lease called Rusty Creek contains more than 3,000 acres. Commonwealth holds a
15% W.I. in this field.
The Corporation's Seedy Draw property, a Turner Formation well is
awaiting completion. Additional information will be released as it becomes
available.
Upon the Corporation filing a copy of this press release and a material
change report with the Alberta Securities Commission and upon the Alberta
Securities Commission being notified by The Alberta Stock Exchange that the
Common Shares of the Corporation have been listed and posted for trading on
The Alberta Stock Exchange, the Cease Trade Order against the Corporation will
be revoked automatically. Commencement of trading of the Corporation's Common
Shares on The Alberta Stock Exchange will be delayed pending receipt and
clearance of documentation by The Alberta Stock Exchange. |
