Pacific Rodera Energy Inc. - Private placement and operations update
Trading Symbol: PRD
VANCOUVER, Sept. 27 /CNW/ - Pacific Rodera Energy Inc. ("PRD") announces
a non-brokered private placement of 5.5 million common flow-through shares at
a price of $1.15 per share for total proceeds of $6,325,000. The financing of
this placement has been taken up predominantly by institutional orders. It is
anticipated that directors and officers of PRD may participate. A fee and
warrants will be paid in connection with the financing in accordance with
applicable securities law and TSX Venture Exchange Policies. The warrants
issued in connection with the fee will be non-transferable and will entitle
the holder to purchase an additional non-flow through common share at a price
of $1.50 per share until March 31, 2005. Completion of the financing is
subject to regulatory approval. PRD intends to use the net proceeds of the
financing on its Northwest Territories (N.W.T.) properties and its Northeast
B.C. (Trutch) area property.
Northwest Territories (N.W.T.)
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Shooting of the summer 2D seismic program covering the company's N.W.T.
lands is just about completed with the first few lines of seismic already
being processed. Data quality appears to be very good. The balance of the
seismic lines, particularly in the vicinity of the B-44 (Wilma) wellbore and
the anticipated K-71 (Betty) location, which will be some of the first lines
interpreted, should be completed around the middle to latter part of October
2004. This seismic program, currently estimated to cost $8.7 million,
($609,000 PRD's share) is on budget and on schedule.
Drilling, Testing and Completion equipment is being assembled and barged
until freeze-up along the Mackenzie River. This equipment is being unloaded at
the staging area on the west side of the Mackenzie River at the same location
used last winter.
The Drilling equipment will be used to drill a well at the K-71 location
to a total anticipated depth of approximately 3,500 m. This well will test a
new separate structure on the company's lands with similar geologic features
to the cased B-44 wellbore of the previous winter. The K-71 well has been
partner approved at a cost of $18.5 million (PRD's share $1,225,000) with an
estimated drilling time of 95 days.
The Testing and Completion equipment also being assembled will be used to
test the B-44 well, drilled the previous winter to a total depth of 3,000 m.
It is estimated that the testing of the various zones in this well will
require at least 80 days to complete. The completion of the B-44 well is
partner approved and the current estimated cost is $16.2 million (PRD's share
$1,100,000). Both the Completion operation and the Drilling operation are to
commence early January 2005.
The company's share of these N.W.T. expenditures amounts to $3.0 million.
This level of activity, or more, can be expected during the next few summer
and winter seasons assuming successful results of these operations.
Furthermore, with indications that the various geologic structures contain
significant amounts of hydrocarbon, expenditures may be accelerated.
Trutch, B.C.
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This area in northeast British Columbia is the company's primary area of
focus for near term cash flow. The operator, Thunder Energy Inc., has surveyed
the well locations for this winter's program. The area has been extremely wet
this summer and most surface activities in the area have been delayed. Our
plans still remain the same with the completion of an all-weather road that
will access that portion of the acreage north of the river giving us all-year
access. The operator has identified up to ten well locations, some being
drilled through to the Debolt Formation, will give the owner's consortium a
more definitive view of reserves and deliverability which in turn will define
processing, transportation and field development including the design of a 3D
seismic program. PRD has an 8% working interest and anticipates this season's
expenditures of up to $15 million (PRD's share $1,200,00).
On behalf of the Directors of
Pacific Rodera Energy Inc.
"Michael K. Barton"
Michael K. Barton, P.Geol.
Chairman and C.E.O.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of the content of this news
release.
Forward Looking Information: This news release may contain forward-
looking statements including expectations of future production, cash flow and
earnings. These statements are based on current expectations that involve a
number of risks and uncertainties, which could cause actual results to differ
from those anticipated. These risks include, but are not limited to: the risks
associated with the oil and gas industry (e.g., operational risks in
development, exploration, and production; delays or changes in plans with
respect to exploration or development projects or capital expenditures; the
uncertainty of reserve estimates; the uncertainty of estimates and projections
relating to production, costs and expenses, and health, safety, and
environmental risks), commodity price, price and exchange rate fluctuations
and uncertainties resulting from potential delays or changes in plans with
respect to exploration or development projects or capital expenditures.