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

To: Kerm Yerman who wrote (14315)	12/16/1998 9:48:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Big Bear takes control at Blue Range Replaces management: Low oil prices foil target's search for a higher bid By CLAUDIA CATTANEO The Financial Post CALGARY -- Big Bear Exploration Ltd. has replaced Blue Range Resource Corp.'s management and directors after rounding up support for its hostile takeover from shareholders representing 67.3% of the shares. Big Bear chairman and chief executive Jeff Tonken, Jim Surbey and Randy Brockway have taken over as the company's new directors, and Big Bear's management team has been appointed as the company's new management. Big Bear, which is operating Blue Range as a subsidiary, has extended its takeover offer until 3 p.m. MST on Dec. 23. Backed by unhappy Blue Range institutional shareholders, the company announced a hostile takeover bid on Nov. 12 for Blue Range, a company with five times its production. Big Bear offered 11 of its shares for each share of Blue Range, or $194-million in stock and the assumption of $105-million in debt. Big Bear has said the takeover will increase its production from 2,300 barrels of oil equivalent (boe) to 14,300 boe, of which 70% is natural gas and 30% light oil. Blue Range searched for a white knight. Despite many expressions of interest, a higher bid did not materialize because of low commodity prices. Big Bear said it has offered jobs to all Blue Range employees. Oil and gas analyst Gord Currie, with Canaccord Capital Corp. in Calgary, said the new group is expected to use the newly acquired assets as a springboard for growth. Tonken has said in the past he wants to build an even bigger company than Stampeder Exploration Ltd., the heavy oil producer sold last year to Gulf Canada Resources for $1-billion. Tonken was Stampeder's chief executive and one of its founders. However, as with the rest of the industry, any growth plans will held back by unreceptive equity markets and tight bank lending because of the oil price crisis, Currie said.

To: Kerm Yerman who wrote (14315)	12/16/1998 9:52:00 AM
From: Kerm Yerman	Respond to of 15196

IN THE NEWS / Remington Energy puts itself on the block Pulls debenture issue: Low oil prices wipe out intermediate tier of Canada's oilpatch By IAN MCKINNON The Financial Post CALGARY -- The ranks of intermediate Canadian energy producers are thinning again as Remington Energy Ltd. said yesterday it now is in play. The Calgary-based company, once a favourite of Bay Street, is another victim of brutal oil prices, high debt, and missed production targets. Andrew Hogg, a Calgary analyst with First Marathon Securities Ltd., said the firm's heavy debt load caused the market to lose confidence. The company will owe about $330-million at yearend and finish with cash flow of $50-million, putting its debt to cash flow ratio at 6.6. Analysts and bankers like the important benchmark for energy firms to stay under 2.5. The company intended to cut its debt with a convertible debenture offering, expected to raise at least $60-million. The financing was pulled yesterday because of recent weakness in Remington's stock, which hit a 52-week low of $4.45 on Dec. 3. The company said an incorrect report from an investment dealer earlier this month, which said $75-million of its bank debt had been called, coincided with the fall in its equity. Remington will not identify the dealer, but other sources named RBC Dominion Securities Inc. as the report's originator. The brokerage has a policy of not talking to the media. "I don't know if anybody could quantify the damage, but it sure didn't help," said one energy analyst. Paul Baay, president and chief executive, said management decided not to proceed with the debenture at current prices because it would have diluted the stakes of existing shareholders. That decision paved the way to put the company on the block, he said. "I think it was directly related to the pricing of the debenture." A tiny producer when it went public in March, 1993, Remington scored exploration and investor success with its oil and gas discovery in the West Stoddart area of northeast British Columbia. But the 115-employee company missed a number of its production forecasts, partially a result of higher than expected natural declines at West Stoddart, Mr. Baay said. This ingredient, when mixed with high debt, caused Remington's shares to fall. The shares closed yesterday at $5.30, a huge drop from its 52-week high of $25.20 set on Jan. 2. Remington produces about 20,000 barrels of oil equivalent per day, split evenly between oil and natural gas. "It's half oil and half gas and that's not bad. Most of their assets are located in northeast British Columbia, so it's not a hodgepodge of properties," said Gord Currie, analyst with Canaccord Capital Corp. in Calgary. Remington could be of interest to firms on both sides of the border. Analysts named Alberta Energy Co. Ltd., Anderson Exploration Ltd., Canadian Hunter Exploration Ltd., Encal Energy Ltd., and Penn West Petroleum Ltd. as possible Canadian buyers. Apache Corp., Burlington Resources Inc., Coastal Corp., and Devon Energy Corp. were picked as potential U.S. bidders. Low oil prices, high debt and no access to equity markets have virtually wiped out the intermediate tier of the Canadian oilpatch. Analysts expect further consolidation as year-end financial and reserve reports are posted.

To: Kerm Yerman who wrote (14315)	12/16/1998 10:08:00 AM
From: Kerm Yerman	Read Replies (14) \| Respond to of 15196

IN THE NEWS / Remington Energy For Sale Stephen Ewart, Calgary Herald Remington Energy Ltd., which was a hotshot among up-and-coming Calgary oil companies, has put itself up for sale as slumping oil prices pushed its debt to an unmanageably high level more than six times its annual cash flow. Remington joins a list of oil and gas producers that have announced this year they are exploring "strategic alternatives" as the oilpatch struggles under the financial weight of the lowest crude oil prices in 12 years. That list includes now-departed Summit Resources Ltd., Archer Resources Ltd. and Arakis Energy Corp. Others, such as Amber Energy Inc., had the decision taken out of their hands when rivals launched hostile takeovers as their stock skidded to 52-week lows. Remington chief executive Paul Baay said it wasn't easy to put a For Sale sign on the company his father started in 1984. "This is definitely a business decision but it sure as heck doesn't make it any easier," he said Tuesday. Baay said management at Remington are significant holders of the company stock and appreciate the concerns of shareholders "In the end, I think it is the right decision," he said. Remington has had a remarkable three-year run after it spudded a wildcat well near Fort St. John, B.C., just after Christmas 1995. It rose from a junior to mid-sized producer with 130 employees. Its stock peaked at $35 a share in August 1997. The potential for a bidding war bumped Remington shares up 80 cents to $5.30 from their 52-week low on Monday. Almost four million shares were traded, making Remington one of the most active issues Tuesday on the Toronto Stock Exchange. As part of its review of all options, Remington scrapped plans to sell $60 million of debt through convertible debentures. Baay said the move won't hurt day-to-day operations as the company was determined to live within its cash flow. Remington projected 1999 cash flow of $50 million and has a debt of more than $300 million. Its market capitalization is about $140 million. In 1997, spent $181-million for the assets of BC Star Partners. In August, it spent $127.5 million to acquire B.C. properties of Canadian Natural Resources Ltd. Craig Langpap, an analyst at Peters & Co., said companies facing rising debt and falling cash flow have the option of cutting costs to the bone and trying to ride out the storm or putting themselves on the market. "This is the impact of a long and painful downturn in oil prices," Langpap said. "You don't have a lot of options." Remington has an enviable package of assets in the West Stoddard area of British Columbia. Langpap said there are six or seven companies competing with Remington in the area so it will likely prompt a great deal of interest. "You're going to see an awful lot of this, with a major shock like the falling oil price," said John Kinsey, a portfolio manager at Caldwell Securities in Toronto. "Now, the main focus is to stay alive and, after that, the companies that are in good shape look around to do some cherry picking" and others look to find buyers.