Anderson Energy Ltd.
TSX : AXL

Anderson Energy Ltd.

September 01, 2007 02:05 ET

Anderson Energy Ltd. Announces Completion of Acquisition of Strategic Assets

CALGARY, ALBERTA--(Marketwire - Sept. 1, 2007) - Anderson Energy Ltd. ("Anderson Energy" or the "Company") (TSX:AXL) announces that it has successfully completed the previously announced acquisition of oil and gas assets (the "Assets") in its core area of greater Sylvan Lake for total cash consideration of $116.1 million before expenses and the completion of the final statement of adjustments by the vendor (the "Acquisition").

The Assets are located in and around the Company's Sylvan Lake Edmonton Sands project area in Central Alberta. First quarter production from the Assets averaged 2,146 barrels of oil equivalent per day ("BOED") and was 75% natural gas. The Assets include 9.6 million barrels of oil equivalent ("MMBOE") of proved plus probable reserves, as estimated by a combination of reports from the vendor's third party engineering firm and the Company's internal qualified reserves evaluator, numerous strategic plant and facility interests and 38,400 gross (25,300 net) acres of undeveloped land. Of particular value to Anderson Energy, 55 gross (32 net) sections of land are prospective for Edmonton Sands drilling, on which the Company has 160 gross (86 net) drilling locations identified. The Acquisition is consistent with Anderson Energy's previously stated strategy of acquiring deeper production and reserves with shallow undrilled potential in the Edmonton Sands.

The Acquisition was financed through the issuance of 25.7 million subscription receipts for common shares at $3.90 per subscription receipt under a bought deal financing and existing credit facilities. The financing closed on August 13, 2007. Funds were released from escrow and the subscription receipts were deemed to have been exchanged and converted to an equivalent number of common shares on August 31, 2007 in conjunction with the closing of the Acquisition. The subscription receipts will be halted from trading on the Toronto Stock Exchange prior to markets opening on September 4, 2007 and will be delisted prior to markets opening on September 5, 2007. The Company now has 87.3 million common shares outstanding.

In conjunction with the Acquisition, the Company has also negotiated an increase in its bank lines from $75 to $105 million subject to completion of customary loan and security documentation.

The Acquisition and related financing will have a meaningful impact on the Company's reserves and production and will substantially increase both its Edmonton Sands and other horizons opportunity base while leaving the Company with sufficient financial flexibility for its planned drilling program.

We encourage anyone interested in further details on our Company to visit our website at www.andersonenergy.ca.

Advisory

Certain information regarding Anderson Energy Ltd. in this news release, including management's assessment of future plans and operations, number of locations in drilling inventory and wells to be drilled, timing of drilling and tie-in of wells, productive capacity of the wells, timing of construction of facilities, expected production rates, dates of commencement of production, capital expenditures and timing thereof and extent of reserve additions, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, wells not performing as expected, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Anderson Energy's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at Anderson Energy's website (www.andersonenergy.ca). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Anderson Energy does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Disclosure provided herein in respect of barrels of oil equivalent ("BOE") may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 thousand cubic feet: 1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Anderson Energy Ltd.
    Brian Dau
    President and Chief Executive Officer
    (403) 262-6307
    (403) 261-2792 (FAX)
    Website: www.andersonenergy.ca