Business
Storm Cat Energy Completes Powder River Basin Acquisition
Storm Cat Energy Completes Powder River Basin Acquisition.
About this update from Sama Resources Inc.
[{"type":"text","content":"\n\n\n\n\nDENVER & CALGARY, ALBERTA, August 30 /CNW/ - Storm Cat Energy Corporation\n(AMEX: SCU, TSX: SME) today announced it has successfully closed the purchase\nof approximately 25,200 gross acres (17,000 net acres) in the Powder River\nBasin for approximately U.S.$30.7 million in cash. The producing property,\nreserves and undeveloped leasehold, located in and around Storm Cat's core\nPowder River Basin coalbed methane operating area, allows the Company to\ncapitalize on economies of scale and operating efficiencies. The acreage is\napproximately 81% undeveloped and 90% of the acreage is located on U.S.\nfederal lands. The effective date of the transaction is July 1, 2006.\nStorm Cat is acquiring approximately 10.2 Bcf of proved reserves, 9.6 Bcf\nof probable reserves and 7.8 Bcf of possible reserves. Pro forma for the\nacquisition, Storm Cat will have approximately 19.8 Bcf of proved reserves,\n13.8 Bcf of probable reserves and 7.9 Bcf of possible reserves. Storm Cat's\nreserve quantity estimations were evaluated by Netherland Sewell & Associates\n(NSAI), a Dallas-based, independent reservoir engineering firm.\nGas production from the acquired properties is approximately 6,600 Mcf/d,\n(approximately 3,000 Mcf/d net), of natural gas from 64 producing CBNG (coal\nbed natural gas) wells, 46 of which will be operated by Storm Cat.\nJ. Scott Zimmerman, President and Chief Executive Officer\ncommented,\"Today's Powder River Basin acquisition represents a major increase\nin the Company's reserve and production capabilities in the basin. Given the\nclose proximity to our current Powder River CBNG operations, we view this as a\nstrategic fit to our asset base. Additionally, these properties can be\ndeveloped using the multi-seam completion technique that provides for\nincreased recovery and reduced finding and development costs, ultimately\nmaximizing the value of the asset. We are excited about the potential\nopportunities this property presents for the Company and its shareholders.\"\nThe proceeds from a recently completed $15 million secured mezzanine\nfacility as well as funds from the Company's $250 million revolving credit\nfacility were used to fund the acquisition.\n\nBy Order of the Board of Directors\nStorm Cat Energy Corporation\n\nJ. Scott Zimmerman\nPresident and Chief Executive Officer\n\nAbout Storm Cat Energy...