CALGARY, July 23 /CNW-PRN/ - Encal Energy Ltd. announced today it has signed a definitive agreement for the acquisition of a significant package of producing properties, undeveloped land, processing and gathering facilities. The properties are located in the Medicine River/Sylvan Lake area of west central Alberta and are being purchased from a major producer. The total transaction, which is effective August 1, 2000, is valued at approximately $110 million and will be funded by the subsequent sale of non core assets and approximately $90 million of new debt. Total debt at the end of 2000 is forecast to be $360-370 million with year 2000 cash flow estimated to be $250-260 million. The cost of this acquisition, inclusive of exploitation activities planned for the balance of 2000, is expected to be below $7.00 per barrel of oil equivalent per day (6:1) and $8.00 per barrel of oil equivalent per day (10:1) on established reserves with production addition costs in the $21,500 barrel of oil equivalent per day (6:1) and $26,000 barrel of oil equivalent per day (10:1) range. ``This acquisition is consistent with Encal's strategy of striving for dominance in key growth areas and a disciplined financial approach relative to acquisition investments. This group of properties is extremely complementary to Encal's Markerville/Sylvan Lake core area with respect to both operations and facilities,'' said David D. Johnson, President and C.E.O. of Encal. As a result of this investment, Encal has increased capital expenditures for 2000 from $225 million to $315 million. Encal Energy Ltd. is a Calgary-based public oil and gas company with core operations in northeastern British Columbia and west central Alberta. The company focuses on growth through drilling primarily directed toward natural gas targets. The company is listed on the Toronto Stock Exchange (symbol ENL) and the New York Stock Exchange (symbol ECA). Certain information contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward- looking statements. SOURCE Encal Energy Ltd. -0- 7/23/2000 /CONTACT: David D. Johnson, President and C.E.O., Steven A. Allaire, Vice President, Finance and CFO, Michael R. Culbert, Vice President Marketing and Business Development, (403) 750-3300/ (ENL. ECA) CO: Encal Energy Ltd. ST: Alberta IN: OIL SU: RLE -30- -0- Jul/23/2000 18:13 GMT EOS (PRN) Jul/23/2000 14:13 85 â -0- (PRN) Jul/23/2000 18:28 GMT
Encal Adds to West Central Alberta Holdings With Acquisition
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