Echo Energy Canada Inc.
Listing: TSX Venture Exchange ("EEI.V")
Issued Common Shares: 60,208,086
TORONTO, July 19 /CNW/ - Trading in the shares of Echo Energy Canada Inc. ("Echo Energy" or the "Company") was suspended by the TSX Venture Exchange ("TSXV") on July 2, 2010 following a cease trade order issued by the Ontario Securities Commission ("OSC") as a result of delays in filing continuous disclosure materials (the "Default") including:
a) audited annual financial statements and related management's
discussion and analysis for the period ending December 31, 2009;
b) interim financial statements and related management's discussion and
analysis for the three-month period ended March 31, 2010;
c) certification of the foregoing filings as required by National
Instrument 52-109 Certification of Disclosure in Issuer's Annual and
Charles Edey, President of Echo Energy, says that the company is attempting to file the required continuous disclosure materials as quickly as possible, but has not been able to cure the Default in time to avoid the issuance of a cease trading order by the OSC and reclassification by the TSXV from Tier 1 to Tier 2 on or about July 16, 2010.
Edey attributed the delay in filing to cash flow constraints resulting from reduced sales at lower prices while replacing the Company's oversized compressor. The installation of a new gas compressor at the Company site near Port Burwell is now complete. The previous compressor was out of service for more than six months and has been removed as it was inefficient and oversized for the operation.
"Selling gas through a neighbour's pipeline for the past six months restricted our capacity and was more expensive. The new compressor will handle all the gas we produce at lower costs," Edey said.
Financial statements could not be completed prior to receipt of the 51-101 evaluation of oil and gas reserves for the December 31, 2009 year-end. Edey announced that Paddock Linstrom & Associates Ltd. (now InSite Petroleum Consultants Ltd.), an independent expert in engineering, geological, technical and advisory services to the oil and gas industry, has delivered the evaluation. As a result, the year-end financial statements and audit are now close to completion and statements for the first quarter ended March 31, 2010 will follow shortly thereafter.
"I am optimistic the Default in filing continuous disclosure materials will be remedied by the end of this month," Edey said.
Throughout, the Company has continued to meet its funding obligations pursuant to a forbearance agreement with The Toronto-Dominion Bank. As previously disclosed, interim financing is being provided by Jamalex Investment Ltd. ("Jamalex") for the purpose of reducing Bank debt, and all contributions have been made in accordance with the terms of the forbearance agreement.
In addition, the Company is pleased to announce it has entered into a joint venture with a gas service company to enable a restart of its drilling program. The drilling program will commence with an initial drilling of two new wells.
These changes within the Company are part of a much broader strategic initiative to ensure stability and viability for continued growth.
About Echo Energy Canada Inc.
Echo Energy Canada Inc. is a publicly traded energy company with revenue producing natural gas production operations near Port Burwell, Ontario, Canada on the shores of Lake Erie.
Statements in this news release that are not historical facts, including statements about plans and expectations regarding properties, reserves, transactions and opportunities, capital resources and future financial results are forward-looking. Forward-looking statements involve risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from those expressed. These uncertainties and risks include changing gas and commodity prices and currency exchange rates, demand for gas, lack of success of future exploration and development, competition and other factors discussed from time to time in the company's filings with the Ontario Securities Commission.
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 news release.
SOURCE Echo Energy Canada Inc
For further information: For further information: Charles Edey, President, at 1-877 396-3540, firstname.lastname@example.org, http://www.echoenergycanada.com