Burmis Energy Inc.
TSX : BME

Burmis Energy Inc.

August 24, 2005 12:23 ET

Burmis Energy Closes $11.1 Million Financing

CALGARY, ALBERTA--(CCNMatthews - Aug. 24, 2005) - Burmis Energy Inc. (TSX:BME) ("Burmis") is pleased to announce that it has closed a previously announced common share private placement. A syndicate of underwriters led by FirstEnergy Capital Corp. and including Acumen Capital Finance Partners Limited, CIBC World Markets Inc. and Westwind Partners Inc. (collectively, the "Underwriters"), participated in this bought deal financing. The private placement of 3.0 million common shares of the Company at a price of $3.70 per common share resulted in Burmis raising total gross proceeds of $11.1 million. The net proceeds from this offering will be used to fund Burmis' expanded exploration and development activities.

2005 CAPITAL PROGRAM & GUIDANCE

Burmis recently increased its 2005 capital budget by 66 percent to $34 million. During the second half of 2005, the Company plans to participate in drilling up to 27 gross (10.9 net) wells. At Pembina, Burmis will participate in drilling an additional 13 gross (2.7 net) wells in the second half of 2005 and participate as an owner in the construction of a new gas plant capable of processing up to 30 million cubic feet per day of natural gas production. Burmis will own 4.5 million cubic feet per day of capacity in this new gas processing facility. Outside the Pembina area, the Company plans to participate in drilling up to 14 gross (8.2 net) wells. This includes exploratory wells at Brazeau, Bigoray and Calais, and development wells at Kehiwin, Ferrier, Westerose, and Easyford.

The Company is forecasting average daily production of 2,000 barrels of oil equivalent per day, and is targeting a 2005 exit production rate of approximately 2,600 barrels of oil equivalent per day. Funds flow in 2005 is expected to be $19 million ($0.61 per share). This is based on forecast prices of US $50.00 per barrel for West Texas Intermediate crude oil and $7.00 per mcf for natural gas over the remainder of 2005. Using these assumptions, and including the net proceeds of the private placement, net debt is projected to be approximately $5.5 million at the end of 2005.

Burmis is a junior Canadian exploration, development and production company which has focussed its operations in west central Alberta. The common shares of Burmis trade on the Toronto Stock Exchange under the symbol "BME".

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction. The Burmis common shares have not been nor will be registered under the United States Securities Act of 1933, and they may not be offered or sold in the United States absent registration or an exemption from registration.

ADVISORY - Certain information regarding Burmis set forth in this document, including management's assessment of the Company's future plans and operations, may constitute forward-looking statements under applicable securities law and necessarily involve risks associated with oil and gas exploration, production, marketing, and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserves estimates, environmental risks, competition from other producers 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.

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Burmis Energy Inc.
    Mr. Aidan M. Walsh, P.Eng., MBA
    President and Chief Executive Officer
    (403) 781-7284
    (403) 261-9028 (FAX)
    or
    Burmis Energy Inc.
    Mr. Scott Dyck, CA
    Chief Financial Officer
    (403) 781-7217
    (403) 261-9028 (FAX)
    Email: ir@burmisenergy.ca
    Website: www.burmisenergy.ca
    or
    Burmis Energy Inc.
    1000, 736 - 6th Avenue S.W.
    Calgary, Alberta
    T2P 3T7