TSX-V SYMBOL: ANG
CALGARY, Feb. 10 /CNW/ - AltaCanada Energy Corp. (the "Company" or
"AltaCanada") is pleased to announce the first closing of the
Company's refinancing totaling approximately $10,300,000 comprised of
$7,700,000 of n
ew equity and the conversion to equity of $2,600,000 of debt. The
financing will reduce debt, will provide positive working capital and
enable the Company to continue its Montana Bakken exploration program
with joint venture/farm-out partners Reliable Energy Ltd. and One Earth
Oil and Gas Inc., including the drilling of three new Montana Bakken
wells, the first of which the Company expects will be spudded on or
about February 24, 2011. AltaCanada's Bakken property represents a
large substantially unexplored Bakken fairway that is geologically
similar to the emerging Alberta Bakken and the Williston Basin. The
three new Bakken wells follow up on AltaCanada's November 2010 Montana
Bakken test well which demonstrated Bakken porosity over a 22 foot
interval and residual oil saturations in the core.
The three proposed Bakken wells will be targeting a structure identified
on 2D seismic and a geologically mapped truncated edge to the Bakken.
The drill depth to approximately 5,000 feet is shallower than
commercial production in the Williston Basin which should lead to lower
drilling and completion costs. The estimated costs are $750,000 for
vertical test wells and approximately $3,500,000 for horizontal wells
completed with multistage fracs. Under the terms of AltaCanada's
farm-out and participation agreements, the Company will pay 12% of the
costs of the next three wells estimated to total $400,000 and will
retain a 30% interest in the wells and nine earned sections per well.
AltaCanada presently holds approximately 400,000 gross acres of
contiguous lands in Blaine County, Montana of which more than 120,000
acres are prospective for the Bakken formation and much of the balance
is prospective for secondary Jurassic oil targets. The Company is also
seeking opportunities to acquire additional acreage within the Bakken
The refinancing of AltaCanada has been accomplished under agreements
with Cornerstone Capital Asset Management L.P., as lead, and Stonecap
Securities Inc., through the issuance of convertible preferred shares
and represents a significant milestone for the Company including the
The Company's name will be changed to Montana Exploration Limited
("Montana Exploration") reflecting the Company's new focus on its
substantial existing acreage position and other potential plays.
Charles V. Selby, currently Chairman, will assume the role of Executive
Chairman of Montana Exploration effective immediately.
The share capital of the Company will be consolidated on the basis of
one new share of Montana Exploration for every 10 existing common
shares of AltaCanada which will become effective at the opening of
trading on Tuesday, February 15, 2011.
Subscriptions have been accepted for convertible preferred shares
totaling $7.7 million to date, with a follow-on closing scheduled for
the week of February 14, 2011. The $7.7 million of subscriptions is
Under the terms of a participation agreement, AltaCanada's farm-in
partner has subscribed for $1.5 million and will have a six month
option to acquire AltaCanada's Canadian non-core properties for their
full proved and probable independent engineering values using a 10% NVP
Insiders and persons sourced by insiders of AltaCanada have subscribed
for approximately $3.0 million.
The balance of the subscriptions received to date have been comprised of
several institutional investors that will be well-positioned to
participate in future financing activity by the Company if the current
exploration program is successful.
Indebtedness of the Company to the National Bank of Canada will be
reduced by $2.275 million to a total of $5.7 million and the Company
will no longer be in forbearance with the Bank. The Company's current
credit facility with National Bank will be extended to November 30,
2011. The National Bank will be issued 5,000,000 warrants, each to
acquire one pre-consolidation common share (500,000 post-consolidation
common shares in the aggregate) in consideration for the extension.
Approximately $3.3 million of subordinate debt of AltaCanada will also
be exchanged for convertible preferred shares. The holder of the
remaining subordinated debt has agreed to extend the repayment of such
debt until November 30, 2011 and will be granted 1,500,000 warrants,
each to acquire a pre-consolidation common share (150,000
post-consolidation common shares in the aggregate) in consideration of
Remaining proceeds from the first closing estimated at $4 million will
be applied to reduce the Company's trade payables, to meet the
Company's obligations under the current drilling program, to pursue
other exploration activities on the Company's lands and for other
general and administrative costs.
Expressed on a post-consolidation, post-name change basis, the
convertible preferred shares will be issued by Montana Exploration for
consideration of $0.50 per share and may be exchanged by the holder at
any time up to 18 months following closing for either:
A post-consolidation common share of Montana Exploration and one full
warrant, which warrant may be exercised for a price $0.80 within 24
months of closing; or
Secured debentures in the principal amount of $0.05 for each preferred
share converted plus interest accrued from the closing date to the date
of conversion. The secured debentures shall bear interest at a rate of
prime plus 2.5% payable quarterly and the principal on the secured
debentures shall be due and payable 24 months from the date of
issuance. Interest on the debentures may, at the election of Montana
Exploration, be paid by the issuance of additional common shares priced
at the prevailing 15 day weighted average share trading price.
Following completion of the first closing of the financing and the
consolidation, the Company will have approximately 16.8 million common
shares outstanding, as well as approximately 154 million preferred
shares outstanding, which in the aggregate may be converted into
approximately 15.4 million post-consolidation common shares and
warrants exercisable to acquire an additional approximately 15.4
million post-consolidation common shares. In addition, 6.5 million
warrants to acquire 650,000 post-consolidation common shares (issued to
lenders of the Company) will be outstanding.
The Company is engaged in the acquisition, exploitation and production
of crude oil and natural gas reserves in Western Canada and Montana.
For more information on the Company, visit www.altacanada.com.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER
(AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE)
ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Caution Regarding Forward Looking Information
This press release contains forward-looking statements within the
meaning of securities laws, including the "safe harbour" provisions of
Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. Forward-looking information
is often, but not always, identified by the use of words such as
"anticipate", "believe", "expect", "plan", "intend", "forecast",
"target", "project", "guidance", "may", "will", "should", "could",
"estimate", "predict" or similar words suggesting future outcomes or
language suggesting an outlook. Forward-looking statements in this
press release include, but are not limited to, the drilling of three
additional wells, the anticipated date the first well will spud,
anticipated drilling costs and the use of proceeds from the financing.
Forward-looking statements and information contained in this press
release are based on our current beliefs as well as assumptions made
by, and information currently available to, us. Although we consider
these assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect.
By their very nature, the forward-looking statements included in this
press release involve inherent risks and uncertainties, both general
and specific, and risks that predictions, forecasts, projections and
other forward-looking statements will not be achieved. We caution
readers not to place undue reliance on these statements as a number of
important factors could cause the actual results to differ materially
from the beliefs, plans, objectives, expectations and anticipations,
estimates and intentions expressed in such forward-looking statements.
These factors include, but are not limited to, the volatility of oil
and gas prices; production and development costs and capital
expenditures; the imprecision of reserve estimates and estimates of
recoverable quantities of oil, natural gas and liquids; the Company's
ability to replace and expand oil and gas reserves; environmental
claims and liabilities; incorrect assessments of value when making
acquisitions; increases in debt service charges; the loss of key
personnel; the marketability of production; defaults by third party
operators; unforeseen title defects; fluctuations in foreign currency
and exchange rates; inadequate insurance coverage; compliance with
environmental laws and regulations; changes in tax and royalty laws;
the Company's ability to access external sources of debt and equity
capital; and the Company's ability to obtain equipment in a timely
manner to carry out development activities. Readers are cautioned that
the foregoing list of factors that may affect future results is not
exhaustive. When relying on our forward-looking statements to make
decisions with respect to the Company, investors and others should
carefully consider the foregoing factors and other uncertainties and
potential events. Furthermore, the forward-looking statements contained
in this press release are made as of the date of this document and we
do not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law. The forward-looking statements contained in this press
release are expressly qualified by this cautionary statement.
SOURCE AltaCanada Energy Corp.
For further information:
|Charles Selby, Executive Chairman |
(403) 265 9091 (ext 247)
(403) 262 8866
|Don Foulkes, President & CEO|
(403) 265 9091 (ext 248)
(403) 265 9021