Board Committees
TSX VENTURE SYMBOL: ONR - | View Quote | View Chart | View Financials |
CALGARY, ALBERTA--(CCNMatthews - Nov. 30, 2005) - Open Range Energy Corp. (TSX:ONR) (TSX:ONR.WT) is pleased to announce the successful closing today of the plan of arrangement among Tempest Energy Corp., Daylight Energy Trust and Daylight Energy Ltd. which resulted, among other things, in the formation of "Open Range", an exciting new exploration and production company.
The Open Range common shares and warrants have been conditionally approved for listing on TSX. It is anticipated that trading will commence on December 2, 2005 under the symbols "ONR" and "ONR.WT" respectively. Each warrant is exercisable for one common share at an exercise price of $3.10. The warrants will expire at 4:30 p.m. (Calgary time) on December 30, 2005.
The warrants may only be exercised by a holder who represents at the time of exercise that the holder is not a resident of the United States or a U.S. Person as defined in Rule 902 of Regulation S under the 1933 Act and is not exercising the warrants for the account or benefit of a U.S. Person or a person in the United States. Non-resident holders may realize the value of the warrants by trading through the facilities of the TSX.
Open Range will initially have 10,040,710 common shares and 1,688,785 warrants outstanding. If all warrants are exercised an additional 1,688,785 common shares will be issued with gross proceeds to Open Range of approximately $5.2 million. Combined with proceeds from an initial private placement of $6.2 million, the total initial equity capital raised would be $11.4 million.
Expenditures over the past two months and anticipated through year end of approximately $6 million have been undertaken for Open Range's account on projects in the Ansell/Sundance area, which is expected to leave Open Range with approximately $5 million of cash at year end. Open Range has concluded negotiations for an initial $8 million revolving line of credit to be instituted with the National Bank.
The initial Open Range assets will be a combination of assets previously held by Daylight and Tempest. Daylight has contributed West 5 production, reserves and undeveloped land from its Big Bend, Ferrier, Garrington and Pembina areas. Tempest has contributed its high impact Ansell/Sundance asset in West Central Alberta. In addition, Daylight has granted Open Range seismic review options in several areas of West Central Alberta.
Open Range will be poised for significant growth from its multiple locations identified in the Ansell/Sundance area. This area is in the centre of a significant multi-zone production and exploration fairway. Open Range plans to be an active land acquirer and driller in this area. Drilling on the the Ansell/Sundance area will be well balanced with the current cash flow and production provided by the producing assets contributed from Daylight.
Key operating and financial information regarding Open Range are as follows:
-- Reserves of 1,031,000 boe proved plus probable, excluding non-producing reserves at Ansell/Sundance, as evaluated by GLJ June 30, 2005.
-- Current production of 400 boe per day (95% natural gas) plus expected near term production additions at Ansell/Sundance of 300 boe/d.
-- Net undeveloped land of 19,800 acres, with seismic review options from Daylight on approximately an additional 72,000 undeveloped net acres.
-- No debt and full tax pool coverage.
Open Range is cognizant of the current environment for technical people and has utilized its competitive position to staff up early and create a team that through the drill bit combined with strategic acquisitions is expected to achieve the corporate production goal of over 10,000 boe/day. Open Range will initially have 16 full-time employees, each of whom is energized, skilled and aligned with shareholders through investing their own capital into Open Range.
The Open Range management team will include the following, many of whom were founders and instrumental in the growth and success of Tempest Energy Corp.:
- A. Scott Dawson, President & CEO
- Gerald R. Costigan, Executive VP
- James F. Bland, VP Exploration
- David M. Griffith, VP & Chief Geophysicist
- Douglas N. Penner, VP Finance & CFO
- Jamie L. Beninger, VP Land
- John A. Mueller, VP Engineering & Operations
The Open Range Board of Directors includes the following industry professionals:
- Harley L. Winger - Chairman of the Board
- A. Scott Dawson
- Ken J. Faircloth
- Dean R. Jensen
- Ken S. Woolner
Management of Open Range is currently formulating its 2006 guidance which it expects to release near term. Currently, Open Range has a drilling inventory for 2006 of 12 locations primarily situated in its multizone Ansell/Sundance area. Open Range is the operator of this property and currently controls over 15 sections of land with working interests generally between 37.5 and 50 percent.
FORWARD LOOKING STATEMENTS
This disclosure contains certain forward looking statements that involve substantial known and unknown risks and uncertainties, certain of which are beyond Tempest's control, including: the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Tempest's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Tempest will derive there from.
Open Range Energy Corp.
Scott Dawson
President and CEO
(403) 205-3704
