FOR IMMEDIATE RELEASE TUESDAY, DECEMBER 21, 2004
Storm Announces Closing of $37.9 Million Asset Acquisition
and 2005 Guidance
Storm Exploration Inc. (TSX – SEO) -
Storm Exploration Inc. (“Storm”) is pleased to
announce that it has closed its previously announced acquisition
of oil and natural gas producing properties for $37.9 million,
subject to typical closing adjustments. Salman Partners Inc.
acted as strategic adviser to Storm in connection with the
asset acquisition.
The acquisition was financed by an expanded $24 million credit
facility and a $6 million bridge facility, both provided by
the Canadian Imperial Bank of Commerce, and from gross proceeds
of $14.4 million from a private placement financing which
closed December 17th, 2004. Storm’s total bank debt
at the end of 2004 is forecast to be $28 million.
For 2005, Storm’s Board of Directors has approved a
$26 million capital program which is expected to include the
drilling of approximately 20 wells (12 net), the completion
of 10 to 15 low risk workovers, tie-ins, and compression projects,
and the expenditure of approximately $5.5 million to tie-in
a standing Slave Point gas well in the Junior area of north
east British Columbia. Production for the year is forecast
to average 3,600 to 3,800 boe per day which is expected to
result in cash flow in the range of $23 million to $24 million
for 2005 using prices of $5.75/GJ at AECO for natural gas
and US $38.00 per barrel of WTI oil.
Pursuant to the private placement financing completed on
December 17th, 2004, Storm issued 3.0 million subscription
receipts at a price of $3.35 per receipt for gross proceeds
of $10.05 million and has received offers to purchase 1.0
million flow-through common shares for $4.35 per common share
for gross proceeds of $4.35 million. With the closing of the
acquisition on December 21st, 2004, the subscription receipts
have been converted into 3.0 million common shares and the
offers to purchase flow-through common shares have been accepted
by Storm and 1.0 million common shares have been issued in
accordance with such acceptance. Total gross proceeds of $14.4
million (blended price of $3.60/share) have been released
from escrow and will be used to fund the acquisition and exploration
and development activities.
The private placement financing was completed with a syndicate
of underwriters led by FirstEnergy Capital Corp. and including
Tristone Capital Inc., Peters & Co. Limited, First Associates
Investments Inc. and Salman Partners Inc.
Storm Exploration Inc. began oil and gas operations effective
July 1, 2004. The Company is headquartered in Calgary, Alberta
and is active at Red Earth in northern Alberta, Brazeau-Pembina
in west central Alberta, the Peace River Arch area of north
west Alberta and north east British Columbia, and at Cabin
in north east British Columbia.
Certain information set forth in this press release, including
management’s assessment of Storm’s future plans
and operations, and management’s assessment of the benefits
to be derived from the assets acquired through the above described
acquisition, contain forward looking statements that involve
substantial known and unknown risks and uncertainties. These
risks and uncertainties, many of which are beyond Storm’s
control, include the impact of general economic conditions,
industry conditions, volatility of commodity prices, currency
fluctuations, geological and engineering risks, imprecision
of production and reserve estimates, environmental risks,
competition from other producers, the lack of available qualified
personnel or management, stock market volatility and the ability
to access sufficient capital from internal and external sources.
Storm’s actual results, performance, or achievement
could differ materially from those expressed in, or implied
by, these forward looking statements and, accordingly, no
assurance can be given that any events anticipated by these
forward looking statements will transpire or occur and, if
any of them do, what costs and benefits will be derived from
them. The forward looking statements contained in this press
release are made as of the date of this press release and
Storm does not undertake to update publicly or revise any
of the forward looking statements included herein in response
to new information, future events or any other circumstances
whatsoever. Further, where reserves and production are stated
on a barrel of oil equivalent basis (“boe”), natural
gas volumes have been converted to a boe equivalent using
a ratio of 6,000 cubic feet of natural gas to one barrel of
oil. This conversion ratio is based upon an energy equivalent
conversion method primarily applicable at the burner tip and
does not represent a value equivalence at the wellhead. Accordingly,
reference to boes may be misleading, particularly if used
in isolation.
For further information, please contact: Brian Lavergne,
President & CEO or, Donald McLean, Chief Financial Officer,
Telephone: (403) 264-3520, Fax: (403) 264-3552.
This news release is not for dissemination in the United
States or to any United States news services. The common shares
of Storm have not and will not be registered under the United
States Securities Act of 1933, as amended (the “U.S.
Securities Act”) or any state securities laws and may
not be offered or sold in the United States or to any U.S.
person except in certain transactions exempt from the registration
requirements of the U.S. Securities Act and applicable state
securities laws.
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION
IN THE UNITED STATES
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