Storm Ventures International Inc.

Storm Ventures International Inc.

March 01, 2010 20:11 ET

Storm Ventures International Inc. Completes Strategic Acquisition of Oil & Gas Assets in West Central Alberta and $150 Million Equity Financing

CALGARY, ALBERTA--(Marketwire - March 1, 2010) - Storm Ventures International Inc. ("SVI" or the "Company") is pleased to announce that it has completed its previously announced acquisition of oil and natural gas assets located in west central Alberta (the "West Central Assets") from certain wholly-owned subsidiaries of Provident Energy Trust, for a total purchase price of approximately $190 million with an effective date of October 1, 2009 (the "Acquisition").

Property Acquisition

The acquired West Central Assets consist mainly of low decline, liquids rich natural gas. The key producing areas acquired include: Brazeau, Gilby, Lochend, Jarrow and Whitecourt. Approximately 25% of the production is from unit interests and 50% is operated. Production during January 2010 was 5,240 barrels of oil equivalent per day (boe/d) comprised of approximately 681 boe/d of light and medium oil, 836 boe/d of natural gas liquids and 22.3 mmcf/d of natural gas. The West Central Assets proved plus probable (P+P) reserves were 14.6 million boe at October 1, 2009. The purchase reflected transaction metrics (without adjustment for undeveloped land and seismic) of $37,037 per flowing boe/d and $13.01 per boe of P+P reserves.

Matthew Brister, President and Chief Executive Officer of SVI said: "We have repositioned our company to include a growth platform in Western Canada with the completion of this transaction. The West Central Alberta properties we acquired provide us with a low decline asset with gas exploitation upside and good facility exposure in a prolific producing fairway. We will use this transaction as a nucleus to develop a core area that we can augment with additional acquisitions and exploration led growth as gas prices recover. The increased cash flow and balance sheet capacity will also support our planned activity in Tunisia and the UKCS through 2011 by which point we expect to have enough internally generated cash flow in each business unit to support future growth."

The total purchase price of the Acquisition was funded by the gross proceeds of $150 million from an equity financing with the remainder by bank debt, set forth below.

Financing

In conjunction with completion of the Acquisition, SVI is also pleased to announce that it has completed the private placement of 42,857,142 common shares of the Company to Her Majesty the Queen in Right of Alberta ("HMQ") on behalf of certain Alberta public sector pension plans, endowments and government funds, at a price of $3.50 per share for gross proceeds of $150 million. The investment by HMQ was made with funds managed by Alberta Investment Management Corporation (AIMCo) which is an Alberta crown corporation which is responsible for managing and investing funds on behalf of certain Alberta public pension plans, endowments and government funds.

In addition the acquisition was financed in part through a $55 million syndicated credit facility with Societe Generale as Lead Arranger and Sole Bookrunner and a syndicate of four domestic and international lenders.

Liquidity and Public Listing

SVI's Board of Directors has determined that in order to best serve the interests of its shareholders, and to expand its access to capital to further grow its business, SVI will begin to explore different alternatives to list its common shares on a public exchange. As part of its commitment under the financing with AIMCo, SVI has agreed to use its reasonable commercial efforts to complete this listing by March 1, 2011.

Advisor

FirstEnergy Capital Corp. acted as SVI's financial advisor in connection with the Acquisition.

About SVI

Storm Ventures International Inc. is a private Alberta oil and gas exploration and production company with current operations focused in North Africa and the North Sea managed from offices in Calgary, Aberdeen and Tunis.

Reader Advisory

All amounts in this news release are stated in Canadian dollars unless otherwise specified.

The reserves information contained in this news release has been prepared in accordance with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" of the Canadian Securities Administrators.

Where applicable, oil equivalent amounts have been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

In the interest of providing SVI's shareholders with information regarding SVI, including management's assessment of the future plans and operations of SVI, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this news release contains forward-looking statements pertaining to the following: expectations of management regarding operating and financial metrics of the Acquisition, potential benefits resulting from the Acquisition and the effect of the Acquisition on SVI's production and reserves.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause SVI's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the following: incorrect assessment of the value of the Acquisition; failure to realize the anticipated benefits of the Acquisition; volatility in market prices for oil and natural gas; and general economic conditions in Canada, the U.S. and globally. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking statements contained in this news release speak only as of the date of this news release. Except as expressly required by applicable securities laws, SVI does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

Contact Information

  • Storm Ventures International Inc.
    Matthew J. Brister
    President and Chief Executive Officer
    (403) 471-7288
    (403) 265-2746 (FAX)
    or
    Storm Ventures International Inc.
    L. Geoffrey Barlow
    Vice President, Finance and Chief Financial Officer
    (403) 265-1619
    (403) 265-2746 (FAX)
    www.stormventuresinc.com