Bow Valley Energy Ltd. announces continuation of negotiations with bank lenders


    TSX Trading Symbol: BVX

    CALGARY, Jan. 2 /CNW/ - Bow Valley Energy Ltd. (Bow Valley or the
Company) announces it is continuing negotiations with its bank lending group
to, among other things, extend the expiry date of its current debt facilities
(all due December 31, 2008), including extending a (pnds stlg)17.5 term
facility, deferral of a scheduled US $10 million amortization payment on its
senior credit facility and extending a scheduled redetermination of its senior
credit facility.
    Because the negotiations involve several interested parties and because
of the difficulty in finalizing the negotiations during the holiday season,
the final details of any waiver extension won't be available until later next
week at which time Bow Valley will make a further announcement. Recognizing
that discussions are ongoing, the Company's lenders have undertaken not to
issue any formal default notice until the current discussions have concluded.
    R.G. Moffat, President and CEO of Bow Valley stated, "The process to
secure waiver extensions to our current debt facilities include negotiations
amongst several parties. These negotiations have been protracted and have
continued over the holiday season and have extended beyond the expiry date of
December 31, 2008. While there can be no assurance as to the outcome of these
negotiations, it is reassuring that the parties involved are working together
toward a common goal of finding an acceptable solution to Bow Valley's current
debt maturities."
    As previously announced, as a consequence of the Company's bank
indebtedness maturities on December 31, 2008 and the current global economic
environment, 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. Bow Valley does not intend to make any further
announcement regarding the strategic review process or the asset disposition
process unless and until its Board of Directors has approved a specific
transaction or other course of action or otherwise deems disclosure of
developments is appropriate.
    R.G. Moffat further stated, "the requested bank waiver extensions to the
maturing debt are intended to provide adequate time to close the previously
announced sale of the Company's Peik asset and pursue the strategic review
process to its conclusion."

    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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