Capco is an independent energy company with its focus in the Gulf of Mexico ("GOM") and the shelf properties. Capco either owns, operates or manages 44 wells in GOM of which 9 wells are currently producing. The remaining wells are not on-line for various reasons including land procurement and Katrina/Rita effects. On land, the Company either owns, operates or manages some 353 wells of which 44 wells are producing. The Company's production is derived from its working interest share, as well as production which the Company manages for a joint venture partner with certain rights to acquire the joint venture partner's interest ("Option Interest") as early as mid 2007. The Company's working interest and Option Interest production levels as of year end 2005 were about 11.4 mmcfd and 230 bopd. Capco expects to return to production 12 GOM wells and 50 land wells in the year 2006. Capco is also engaged in exploratory activities where the Company may participate with industry partners and/or generate its own prospects where Capco will drill such prospects by promoting to industry partners to reduce its risk of exposure.
-Capco operates 78 wells in GOM of which 23 are producing.
-In September 2006 Capco acquired 17 wells for $83.0 million, producing about 17.0 mmcfde at the time of the acquisition in GOM.
-Current production from the 23 Operated wells and 15 non operated wells is 19.5 mmcfd and 2600 bopd
-Capco’s net working interest share is 7.25 mmcfde
-Estimated PV 10 discounted proved reserves as of year end 2006 are $29.0 million.
-Expected additional cash flow attributed from approximately $9.0 million of reserves by September 2007
-Capco has significant land holdings with numerous exploratory and developmental opportunities
-Key prospect located in Vermilion field with estimated recoverable reserves of 250 BCF
-Excess to a deep drilling prospect in Green Canyon property, which has potential of some 175 million barrels of oil.
-Capco has a master credit agreement with Union Bank of California
-Capco’s total bank debt has been reduced from cash flow to $16.0 million with Capco’s share of this debt at approx. $8.0 million.
THE BIG NEWS!!
Pyramid Petroleum and Capco Energy announce plan for business combination
CALGARY and HOUSTON, June 11 /CNW/ - Pyramid Petroleum Inc. (TSXV: PYR) ("Pyramid" or the "Company") and Capco Energy, Inc (CGYN.PK) ("Capco") announced today that their respective boards of directors have approved the execution of a Letter of Intent whereby Pyramid would acquire all of the outstanding common shares of Capco in exchange for common shares of Pyramid ("Common Shares"), as a result of which Capco will be a wholly owned subsidiary of Pyramid.
The number of Common Shares to be issued will be based upon the net asset value ("NAV") of Pyramid and Capco, determined by, among other factors, the discounted NAV of the oil and gas reserves of each company. An independent committee will select an independent third party appraiser to provide a fairness opinion on the transaction. Both companies have agreed to abide by the results of this opinion. The completion of this business combination will be subject to all necessary documentation, due diligence, and regulatory and shareholder approvals.
Capco is currently trading on the pink sheets in the US, but has not filed current financial information with the appropriate regulatory authorities. It anticipates that financial statements for the period ending December 31, 2006 and March 31, 2007 will be completed and filed within two to three months. A follow-up press release will be issued at that time. Capco's reserve report as of December 31, 2006 is not prepared in accordance with NI 51-101 guidelines and such evaluation is being conducted currently and the results will be announced in a follow-up press release.
Due diligence by both parties is on-going, and this transaction will be subject to disinterested shareholder approval and review by the TSX Venture Exchange. There is no assurance that the Exchange will accept the proposed transaction, the disinterested shareholders will approve it, or that both companies will be satisfied with their due diligence results.
Mr. Ilyas Chaudhary, the majority shareholder in both companies, as well as being the CEO of both companies, will not participate in the selection of the third party appraiser for the transaction, nor will he vote on any issue concerning this transaction. No other Capco directors have been identified at this time to join the board of Pyramid.
Following the transaction, Pyramid is expected to have the following key characteristics:
- Operation of approximately 125 wells in the Gulf of Mexico.
- Ownership of producing onshore oil and gas assets in Texas, Montana and Alberta.
- A net undeveloped land position of 82,000 acres in various prolific areas.
- Certain Gulf of Mexico prospects developed with 3-D seismic interpretation being marketed for exploratory drilling purposes.
- Primary business headquarters will be in Houston, Texas.
Following the acquisition, Pyramid expects to raise funds to expand the oil and gas production of the combined company, mainly in the Gulf of Mexico, focusing on low risk producing opportunities.
Safe Harbor Statement under the Private Securities Litigation Reform Act: Except for statements of historical fact, all statements in this press release, without limitation, regarding new projects and future plans and objectives are forward-looking statements which involve risks and uncertainties, including uncertainty regarding future revenue and integration. These and other risks are identified in our SEC filings and should be considered in evaluating the forward-looking statements made herein. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. These risks could cause actual financial results to vary from those anticipated.
For further information
Mansoor A. Anjum, President, Pyramid Petroleum, Inc., email@example.com, (403) 234-9000, www.pyramidpetroleum.com
Robert Thomasson, COO, Capco Energy, Inc., firstname.lastname@example.org, (713) 622-5550, www.capcoenergy.net
Ken Wetherell, Investor Relations, Bryan Mills Iradesso, email@example.com, (403) 503-0144 x224
Float: est. to currently be less than 10 million
Insider Holdings: 33% of Shares
Major Holders: Peninsula Capital Management: 6,666,666 http://www.penfund.net/page.php?url=team
More Links/DD of Interest
CEO interview: http://www.macreport.net/featured/CGYN/company.asp