Bow Valley Energy Ltd. announces bank debt and operations update


    TSX Trading Symbol: BVX

    CALGARY, Jan. 21 /CNW/ - Bow Valley Energy Ltd. (Bow Valley or the
Company) announces it has received from its bank lending group waivers and
extensions to an interim date of February 15th, 2009 for its senior and
subordinated acquisition facilities. The waivers and extension are provided in
conjunction with the previously announced strategic review process being
undertaken by the Company.
    In respect of the senior facility the date for the scheduled
redetermination at December 31, 2008 has been waived to February 15, 2009 and
the US $10 million fixed minimum repayment has been extended by six months to
June 30, 2009. The due date of the (pnds stlg)17.5 million acquisition
facility has been extended to February 15, 2009. The Company expects that
further waivers and extensions will be provided beyond the interim date of
February 15, 2009, permitting the strategic review process to draw to a
logical conclusion late in the first quarter or early in the second quarter.
In consideration of the waivers and extensions, Bow Valley has agreed to a fee
of US $3 million payable upon the cancellation of all outstanding UK corporate
    As previously announced, Bow Valley's Board of Directors appointed a
Special Committee composed of independent directors and has engaged Scotia
Waterous Inc. to examine and consider a range of strategic alternatives
available to the Company. These alternatives will include, among other things,
potential asset divestments, equity alternatives, strategic alliances, joint
venture opportunities, mergers or a corporate sale transaction.
    No decision on any particular alternative has been reached at this time
and there can be no assurance that the strategic review process will result in
any change in the Company's current operations or that the Company will pursue
any particular transaction.
    Additionally, the Company advises that the Pan-Canadian Investors
Committee has announced the implementation of the restructuring Plan affecting
CDN $32 billion of third party Asset Backed Commercial Paper ("ABCP"). Bow
Valley invested in 2007 in ABCP with a face value of CDN $40.6 million. The
completion of the restructuring Plan should facilitate the establishment of an
orderly trading market for the ABCP enabling the Company to determine the
market value of its investment. In the interim, the Company has been provided
with a borrowing facility from a Canadian bank in the amount of CDN $30
million principally secured by the investment in ABCP. The Company will make a
decision at a later date whether to continue to hold or dispose of its


    Bow Valley reports fourth quarter 2008 production averaged approximately
4,800 boe/d representing a 300 boe/d increase above previous guidance. The
year-end exit production capacity was running at approximately 5,400 boe/d.
Sales volumes, which differ from production volumes due to the timing of
tanker liftings, averaged approximately 5,200 boe/d during the fourth quarter
    Production from the Chestnut field has continued to exceed expectations
since the field commenced production in September 2008. A second production
well was recently drilled in the fourth quarter and scheduled work is underway
to tie this well into the Sevan FPSO production facilities. This well should
add approximately 7,500 gross (1,135 net) barrels of production per day by
    Development of the Ettrick field is also nearing completion. The
Bluewater FPSO, "Aoka Mizu" is undergoing final preparations in Rotterdam
before being transported to location on the Ettrick field in approximately 10
days. First oil production from the Ettrick field development is currently
scheduled for early March 2009. The Ettrick field is forecast to add
approximately 20,000 gross (2,400 net) barrels of production per day when
stabilized production rates are achieved.

    Bow Valley Energy Ltd. is an international oil and natural gas
exploration, development and production company with operations in the U.K.
sector of the North Sea and Alaska. The common shares of the Company trade on
the Toronto Stock Exchange under the symbol BVX.
    Additional information, financial statements, and management's discussion
and analysis relating to the Company may be found on the SEDAR website at or on the Company's website at

    Legal Notice - Forward Looking Information

    Certain statements included or incorporated by reference in this news
release constitute forward-looking statements or forward-looking information
under applicable securities legislation. Such forward-looking statements or
information are provided for the purpose of providing information about
management's current expectations and plans relating to the future. Readers
are cautioned that reliance on such information may not be appropriate for
other purposes, such as making investment decisions. Forward-looking
statements or information typically contain statements with words such as
"anticipate", "believe", "expect", "plan", "intend", "estimate", "propose",
"project", "seek", "continue", "forecast", "may", "will", "potential",
"could", "should" or similar words suggesting future outcomes or statements
regarding an outlook. Forward-looking statements or information in this news
release include, but are not limited to, statements or information with
respect to: business strategy and objectives; development plans; exploration
plans; acquisition and disposition plans and the timing thereof; reserve
quantities and the discounted present value of future net cash flows from such
reserves; future production levels; capital expenditures; net revenue;
operating and other costs; royalty rates and taxes.
    Forward-looking statements or information are based on a number of
factors and assumptions that have been used to develop such statements and
information but which may prove to be incorrect. Although the Company believes
that the expectations reflected in such forward-looking statements or
information are reasonable, undue reliance should not be placed on
forward-looking statements because the Company can give no assurance that such
expectations will prove to be correct. In addition to other factors and
assumptions which may be identified in this news release, assumptions have
been made regarding, among other things: the effects of increasing
competition; the general stability of the economic and political environment
in which the Company operates; the timely receipt of any required regulatory
approvals; the ability of the Company to obtain qualified staff, equipment and
services in a timely and cost-efficient manner; the ability of the operator of
the projects which the Company has an interest in to operate the field in a
safe, efficient and effective manner; the ability of the Company to obtain
financing on acceptable terms; field production rates and decline rates; the
ability to replace and expand oil and natural gas reserves through
acquisition, development or exploration; the timing and costs of pipeline,
storage and facility construction and expansion and the ability of the Company
to secure adequate product transportation; future oil and natural gas prices;
currency, exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the countries in which the
Company operates; and the ability of the Company to successfully market its
oil and natural gas products. Readers are cautioned that the foregoing list is
not exhaustive of all factors and assumptions which may have been used.
    Forward-looking statements or information are based on current
expectations, estimates and projections that involve a number of risks and
uncertainties which could cause actual results to differ materially from those
anticipated by the Company and described in the forward-looking statements or
information. These risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements or information include,
among other things: the ability of management to execute its business plan;
general economic and business conditions; the risk of war or instability
affecting countries in which the Company operates; the risks of the oil and
natural gas industry, such as operational risks in exploring for, developing
and producing crude oil and natural gas; market demand; the possibility that
government policies or laws may change or governmental approvals may be
delayed or withheld; risks and uncertainties involving geology of oil and
natural gas deposits; the uncertainty of reserves estimates and reserves life;
the ability of the Company to add production and reserves through acquisition,
development and exploration activities; the Company's ability to enter into or
renew leases; potential delays or changes in plans with respect to exploration
or development projects or capital expenditures; the uncertainty of estimates
and projections relating to production (including decline rates), costs and
expenses; fluctuations in oil and natural gas prices, foreign currency,
exchange, and interest rates; risks inherent in the Company's marketing
operations, including credit risk; uncertainty in amounts and timing of
royalty payments; health, safety and environmental risks; risks associated
with existing and potential future law suits and regulatory actions against
the Company; uncertainties as to the availability and cost of financing; and
financial risks affecting the value of the Company's investments. Readers are
cautioned that the foregoing list is not exhaustive of all possible risks and
uncertainties. Additional risk factors affecting the Company and its business
are contained in the Company's Annual Information Form filed on SEDAR at
    The forward-looking statements or information contained in this news
release are made as of the date hereof and the Company undertakes no
obligation to update publicly or revise any forward-looking statements or
information, whether as a result of new information, future events or
otherwise unless required by applicable securities laws. The forward-looking
statements or information contained in this news release are expressly
qualified by this cautionary statement.

    Where amounts are expressed on a barrel of oil equivalent (boe) basis,
natural gas volumes have been converted to barrels of oil equivalent at six
thousand cubic feet to one barrel of oil equivalent (6 mcf = 1 boe). This
conversion ratio is the conversion used in the oil and natural gas industry
and is based on an energy equivalency conversion method primarily applicable
at the burner tip and does not represent a value equivalency at the wellhead.
The use of boe's may be misleading, particularly if used in isolation.

    %SEDAR: 00008379E

For further information:

For further information: Bow Valley Energy Ltd., Robert G. Moffat,
President and Chief Executive Officer, or C.W. Leigh Cassidy, Vice President,
Chief Financial Officer, Phone (403) 232-0292, or Scotia
Waterous Inc., Drew Ross, Managing Director, Phone (403) 261-4226

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