Stoneham Drilling Trust

Stoneham Drilling Trust

January 06, 2005 08:58 ET

Stoneham Drilling Trust Closes Initial Public Offering And Announces The Completion Of Rig #7


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: STONEHAM DRILLING TRUST

TSX SYMBOL: SDG.un

JANUARY 6, 2005 - 08:58 ET

Stoneham Drilling Trust Closes Initial Public Offering
And Announces The Completion Of Rig #7

CALGARY, ALBERTA--(CCNMatthews - Jan. 6, 2005) - NOT FOR DISTRIBUTION TO
U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Stoneham Drilling Trust (TSX:SDG.un) ("Stoneham" or the "Trust") is
pleased to announce the following:

Closing of its Initial Public Offering

Stoneham has completed its initial public offering of 1,666,667 trust
units at a price of $12.00 per unit for gross proceeds of $20 million.
The units of the Trust ("Trust Units") commenced trading today on the
Toronto Stock Exchange under the symbol "SDG.un".

The Trust expects to commence paying monthly cash distributions of
$0.125 per Trust Unit per month ($1.50 per Trust Unit per year) with the
initial cash distribution expected to be paid on February 15, 2005 to
holders of Trust Units of record on January 31, 2005. Based on the
offering price, size and initial distribution, the Trust Units will
provide investors with an initial annual yield of 12.5%. The net
proceeds from the offering will be used for the repayment of debt
incurred in the construction of two 4,000 metre triple drilling rigs
(Rig #7 and #8), long term debt repayment and for general working
capital purposes.

The initial public offering was completed through a syndicate led by
Raymond James Ltd., and includes FirstEnergy Capital Corp. and HSBC
Securities (Canada) Inc. Stonepoint Strategic Advisors Inc. acted as
strategic advisor to the Trust.

Rig Construction Update

Stoneham announces the completion of construction of Rig #7. Rig #7 was
completed on time and on budget and will commence its drilling program
for a large Canadian oil and natural gas exploration and production
company in mid January 2005. Rig #8 is on time and on budget and is
scheduled to commence its drilling program in February 2005.

Stoneham is an unincorporated open-end investment trust governed by the
laws of the Province of Alberta and was created for the purpose of
investing in the securities of Stoneham Drilling Limited Partnership
("Stoneham L.P."). Stoneham L.P.'s business includes the provision of
contract drilling services to oil and natural gas exploration and
production companies operating in western Canada, using its fleet of six
modern 3,000 metre telescopic double drilling rigs. In addition,
Stoneham L.P. has recently completed construction of a 4,000 metre
telescopic triple drilling rig and is currently completing the
construction of an additional 4,000 metre telescopic triple drilling rig.

The trust units offered will not be and have not been registered under
the United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States or to a U.S. person, absent
registration, or an applicable exemption therefrom. This news release
shall not constitute an offer to sell or the solicitation of an offer to
buy the trust units in any jurisdiction. This news release may contain
forward-looking statements concerning the anticipated performance of the
Trust. Forward-looking statements are based on the estimates and
opinions of management at the date the statements are made, and the
Trust undertakes no obligation to update forward-looking statements if
conditions or opinions should change. The Toronto Stock Exchange has
neither approved nor disapproved of the information contained herein.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Stoneham Drilling Trust
    Bruce Jones
    President and CEO
    (403) 264-7777
    or
    Stoneham Drilling Trust
    Jack Smart
    CFO
    (403) 264-7777