CALGARY, Oct. 4 /CNW/ - Result Energy Inc. ("Result", RTE-X) is pleased to announce that on September 28 and October 4, 2007 it completed a non-brokered private placement of common shares which consisted of 7,410,000 common shares issued on a flow-through basis for income tax purposes at $0.60 per share (the "Placement"). The gross proceeds of $4,446,000 ($4,312,620 net of finders fees payable to third parties of $133,380) is intended to be used to finance ongoing exploration activities, and for general corporate purposes. Result is required to incur qualifying expenditures totaling $4,446,000 by December 31, 2008 and will renounce this amount of Canadian Exploration Expenses ("CEE") to subscribers effective December 31, 2007.
The shares issued will be subject to a four-month hold period from the date of each closing. Following completion of this placement, Result has 54,891,638 common shares outstanding.
Operations Update
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Despite the ongoing softness in natural gas prices, the Company continues to take a positive long-term outlook towards exploration and development activities in Western Canada. Result continues to generate and carry a sizeable drilling inventory on a variety of projects. In the near term, we plan to shift our exploration drilling focus towards oil and liquids-rich natural gas plays. We also expect that the market price for natural gas will recover over the next 12 months, at which point we will be well-positioned to ramp up activities on several large-scale natural gas initiatives. The current Placement allows the Company to maintain momentum on several key development projects, which will continue to underpin the Company's cash flow.
Result's current field-estimated production volume is approximately 1,065 boe/d. Volume has declined from previous record levels achieved in Q1-07, primarily due to payout conversions on two high-volume Pembina wells.
During the Q4-07 period, Result plans to participate in the drilling of up to 10 gross wells. The highlights of this drilling program include:
Exploration Activity
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Windfall - Result has spudded the first of two wells, which will test a new liquids-rich Devonian-aged natural gas prospect at Windfall, Alberta. The company's working interest in these wells will be 33% and 28% respectively. Preliminary drilling results from this project are expected in November.
Peace River Arch - Result participated in the drilling of 2.0 (1.0 net) appraisal wells on its Devonian Eureka natural gas project during September. Completion and testing operations on these wells are currently in progress. The Company also plans to spud an exploratory well on a new light oil play at Royce late in Q4, and we will resume drilling operations on our potential high-impact Devonian gas play at Mearon as soon as winter access conditions permit.
Development Activity
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Kakwa - Result has recently completed the drilling of a second deep-basin style gas well at Kakwa. This well has encountered multiple prospective producing horizons, which are scheduled to be completed during Q4. This is a follow-up to a successful well drilled in Q1-07, with potential tie-in of both wells to occur in early 2008. Result's working interest in the two wells averages 22.5%.
Pembina/Modeste - During the second quarter, drilling operations were completed on 2.0 (1.0 net) wells at Modeste, Alberta, targeting an extension of the Company's high-deliverability Viking natural gas play. Completion, stimulation and testing operations on these wells have been delayed to Q4 due to extremely wet local surface conditions.
Dodsland - During Q4, Result plans to participate in the drilling of an additional 5 to 8 development infill wells on the Company's shallow Viking gas project at Dodsland, Saskatchewan. Over the past several months, drilling and completion costs have declined substantially in this area, allowing the Company to generate improved project economics.
Investors are cautioned that this news release contains forward looking information. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements. In addition, Result has applied the industry standard of converting natural gas volumes at six thousand cubic feet per barrel (6 mcf/bbl) of natural gas to barrels of oil equivalence ("boe"). Boe units may be misleading, particularly if used in isolation.
Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
The TSX Venture Exchange does not accept responsibility for the adequacy
and accuracy of this release.
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