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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Herb Duncan who wrote (9283)	2/27/1998 1:53:00 AM
From: Kerm Yerman	Respond to of 15196

ACQUISITIONS / Meota Resources Aquires Property From Senior Oil MEOTA RESOURCES CORP. ASE SYMBOL: MRZ.A FEBRUARY 26, 1998 Meota Acquires From Senior Oil and Gas Company CALGARY, ALBERTA--MEOTA RESOURCES CORP. ("Meota" or the "Company") announces that it has agreed to acquire from a senior oil and gas company all of the outstanding shares of a private company, which owns long-life, non-operated oil and gas properties located in Western Canada, for cash and property consideration of $36.75 million. The properties include 60,100 (19,310 net) acres of undeveloped land. Based on an independent engineering evaluation of the assets by Paddock Lindstrom & Associates Ltd., proved plus probable reserves are estimated at 6.2 million boe as at January 1, 1998. Estimated 1998 proved production from the properties is approximately 800 bbl/d of oil and natural gas liquids and 8.0 mmcf/d of natural gas. Meota also announces that it has entered into a letter agreement with Prairie Birch Royalties Ltd. ("Prairie Birch") to acquire a package of non-operated oil and gas assets located in Western Canada for consideration of approximately $19 million payable as to $2.5 million in cash, $10 million by way of the issuance of Non-Voting shares of Meota at a price of $1.00 per share and $6.5 million by way of the issuance of an 8 percent promissory note to Prairie Birch. W. Brett Wilson and Larry G.J. Moeller, who are both shareholders and directors of Meota, are also shareholders of Prairie Birch. The resolution approving the transaction was passed by the independent members of the Board of Directors of Meota. The assets to be acquired by the Company from Prairie Birch include 406,300 (133,900 net) acres of developed and undeveloped land. Based on an independent engineering evaluation of the Prairie Birch assets by KAH Consulting Ltd., proved plus probable reserves are estimated at 3.7 million boe as at January 1, 1998. Estimated 1998 production from the properties is approximately 275 bbl/d of oil and natural gas liquids and 5.0 mmcf/d of natural gas. The above acquisitions, which total $55.75 million, will be funded by a new debt facility in the amount of $32.5 million, the proceeds of a flow-through private placement of up to 2.0 million Class A shares and up to 3.0 million Non-Voting shares at a price of $1.00 per share, the issuance of 10.0 million Non-Voting shares at a price of $1.00 per share, a promissory note in the amount of $6.5 million and property consideration with a deemed value of $2 million. Cheni Resources Inc. ("Cheni"), the largest holder of Class A shares of Meota with 22.8 percent of the issued Class A shares, supports these transactions. Closing of the transactions, which are subject to certain regulatory approvals and due diligence, is anticipated in April 1998. Pursuant to the above transactions, issued share capital will consist of 10.3 million Class A shares and 26.4 million Non-Voting shares. Concurrent with these transactions, the Company intends to grant, subject to regulatory approval, 0.2 million Class A share options and 1.3 million Non-Voting share options at a price of $1.00 per option. The Company will then have granted 1.0 million Class A share options and 2.6 million Non-Voting share options. Meota is an Alberta based company whose mandate is to acquire non-operated, long-life oil and natural gas assets. Meota anticipates closing additional acquisitions in 1998 that are consistent with this mandate. Total corporate production for 1998 is currently estimated to be approximately 2,750 boepd.