CALGARY, Feb. 14 /CNW/ - Result Energy Inc. ("Result"; TSX-V: RTE) is pleased to announce the following financing activities:
The TSX Venture Exchange has approved amendments to the terms of existing convertible debentures totalling $3,275,000 (the "Convertible Debenture Financing") which were issued in September 2006. Under the terms of the amended Convertible Debenture Financing, the debentures' maturity date has been extended by 4 months from February 28 to June 30, 2008, and effective from March 1, 2008 the convertible debentures will bear interest at 10% per annum and will be convertible at the option of the holder into Result common shares at $0.40 per common share (previously at prime +3% and $1.15 per share respectively). The convertible debentures continue to be repayable in cash at Result's option, subject to the debenture holders' prior rights to convert. The reduction in the conversion price to $0.40 will not create a new insider or control person.
Result is in process of securing from its bankers a $2 million short-term secured bank term loan facility. The facility will bear interest at prime + 3%, matures April 30, 2008, and is in addition to the Company's existing $14 million bank revolving facility.
Holders of convertible debentures totaling $1,275,000 have agreed to the above noted amendments, and the $2 million bank term loan facility will be used to fund repayment of the remaining $2 million of convertible debentures on February 28.
Result is in process of selling the majority of its Saskatchewan natural gas properties, with an expected closing date of March 31, and intends to use the proceeds from the sale to repay the remaining debentures and substantially all bank debt. Post closing of the sale, this restructuring should allow Result to exit Q1-08 with estimated production of 1,000 to 1,100 boe/d, be virtually debt free, and have significant operating cash flow to apply to its remaining inventory of 2008 exploration projects.
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.
The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.
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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