CALGARY, Aug. 14 /CNW/ - GEOCAN Energy Inc. ("GEOCAN" or the "Company")
(TSX: GCA) announces its financial results for the quarter ended June 30,
2008 Second Quarter Results
Cash flow from operating activities was $2.73 million ($0.05/diluted
share) for the second quarter 2008 compared to $4.04 million ($0.07/diluted
share) for the second quarter 2007. Earnings after tax were $0.51 million or
$0.01/diluted share for the second quarter 2008 compared to a loss of
$(1.27) million or ($0.02)/diluted share in the second quarter 2007.
Six month 2008 cash flow was $7.95 million ($0.14/diluted share) compared
to $6.86 million ($0.13/diluted share) for 2007. Six month 2008 earnings after
tax were $0.28 million or $nil/diluted share compared to a loss of
$(4.25) million or $(0.08)/diluted share for the six month period of 2007.
GEOCAN averaged sales of approximately 917 BOE/d during the second
quarter split 42% to light and medium oil and 58% natural gas.
Natural gas prices averaged $10.56/mcf in second quarter 2008, up 43%
from $7.37/mcf in second quarter 2007. Light and medium oil prices (before
financial instruments) averaged $102.75/bbl in second quarter 2008 up 99% from
$51.60/bbl in second quarter 2007.
The Company had two hedge contracts in place during the second quarter.
One of these, a swap contract for 125 boepd at USD$72.15/bbl WTI expired on
June 30, 2008. As at June 30, 2008, the Company had one contract remaining for
150 boepd at USD$75.25/bbl WTI which will expire on December 31, 2008.
GEOCAN is strategically focused within three core areas, namely, east
central Alberta, west central Alberta and northeastern British Columbia.
GEOCAN holds 121,415 gross (78,247 net) undeveloped acres of land within its
three core areas.
Further information regarding the Company's second quarter 2008 results
is contained in the Company's June 30, 2008 consolidated financial statements,
the attached notes and the management's discussion and analysis relating
thereto, all of which are available for viewing on SEDAR (www.sedar.com) and
on the Company's website (www.geocan.com).
Review of Strategic Alternatives Process
On March 6, 2008 the Company announced that its board of directors had
unanimously approved a process to review strategic alternatives to maximize
shareholder value and had retained Tristone Capital Inc. to act as its
exclusive financial advisor. These alternatives included the sale of the
Company, an amalgamation or reorganization or such other transaction that is
considered to be in the best interest of GEOCAN. Interested parties were
invited to a confidential data room set up by Tristone to evaluate the
existing assets and future potential of the Company.
As announced on August 7, 2008 that process culminated in an agreement
being reached with Arsenal Energy Inc. and the Company whereby Arsenal agreed
to acquire GEOCAN pursuant to a plan of arrangement under the Business
Corporations Act (Alberta). Under the plan of arrangement, Arsenal will
acquire all of the outstanding class "A" common shares of GEOCAN ("GEOCAN
Shares") for consideration of $0.70 per GEOCAN Share, payable, at the election
of each GEOCAN shareholder, in cash or 0.81 of a common share of Arsenal. The
consideration to be paid by Arsenal under the Arrangement of $0.70 per GEOCAN
Share represented a premium of 29% over the five day weighted average trading
price of the GEOCAN Shares to and including August 7, 2008 of $0.541. The
value of the total consideration to be paid by Arsenal for the GEOCAN Shares,
based upon a share value of $0.865 for each Arsenal Share and taking into
account assumed debt of approximately $8 million, is approximately
$47.2 million. Complete disclosure of the transaction can be found on
www.sedar.com, the Company website at www.geocan.com and Canada newswire at
Advisory -- Forward-looking Information
This press release may include certain forward-looking statements. These
statements involve known and unknown risks, uncertainties, and other factors
that may cause actual results or events to differ materially from those
anticipated in the forward-looking statements. However, while management
believes these forward-looking statements to be reasonable, the reader cannot
be assured that these expectations will prove to be correct. The reader should
not unduly rely on these forward-looking statements as these statements speak
only as of the date of August 14, 2008. Additional information about the
company can be found on www.sedar.com.
Barrel of oil equivalent (BOE) may be misleading, particularly if used in
isolation. A BOE conversion ratio for natural gas of 1 bbl : 6 mcf. This is
based on an energy equivalency conversion method particularly applicable at
the burner tip and does not represent a value equivalency at the wellhead.
For further information:
For further information: Wayne Wadley, President and CEO or Brad Farris,
VP Finance and CFO, GEOCAN Energy Inc., Phone (403) 261-3851, Fax (403)
261-3834, Email email@example.com or firstname.lastname@example.org, Website: