Caribou Resources Corp.
TSX VENTURE : CBU

Caribou Resources Corp.

November 01, 2005 09:00 ET

Caribou Resources Corp. Announces Closing of $13.5 mm Acquisition

CALGARY, ALBERTA--(CCNMatthews - Nov. 1, 2005) - Caribou Resources Corp., (TSX VENTURE:CBU), ("Caribou"), is pleased to announce that it has closed the previously announced purchase of oil and gas assets from a senior oil and gas producer in the company's northern core area. The acquisition is strategic in that it represents a consolidation of interests in existing lands, adds significant highly prospective contiguous undeveloped lands, as well as ownership and control of extensive infrastructure and facilities. The acquisition will improve the company's exploration efficiency and operating costs on future development in the area.

Caribou estimates that production from this acquisition will average 250 boe/d (94% natural gas), for the remainder of 2005. The purchase includes an 80% working interest ("WI") and operatorship of a 35 mmcf/d gas plant (built in 1999), a 100% working interest in other significant gas gathering lines and a 20% WI in a 10" and 12" 50 kilometer northern line. The purchase takes Caribou's WI in many of its existing lands in the area to 100% and increases the Company's total land position to over 200,000 undeveloped net acres.

With the closing of this transaction, Caribou estimates that current sales production is approximately 1,700 boe/d. The Company also anticipates that two wells drilled at Redwater in Central Alberta will be tied in by year end. In addition, three more wells are planned to be drilled by year end. The company has approximately 34.8 million common shares outstanding and, net debt of approximately $16.0 mm (including financing of the acquisition provided through a bridge facility arranged with Brascan Bridge Lending Fund). Caribou has a line of credit with the CIBC of $15.5 million and cash flow is over $1.0 million per month.

With the increased exploration, development and optimization upside provided as a result of closing this transaction, the company is planning an increased 2005 -2006 winter capital expenditure program of approximately $25 million.

The Company also advises that it is presenting at the Small Explorers and Producers Association of Canada (SEPAC) Investment Symposium today. The updated presentation is posted on the Company's website or can be heard by going to www.newswire.ca/en/webcast/index.cgi.

This news release may contain forward looking statements. Actual results may differ materially from those contemplated. The risks, uncertainties and other factors that could influence actual results are described in documents filed with regulatory authorities.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Caribou Resources Corp.
    Christina M. Fehr
    Vice Chairman & CEO
    (403) 539-4322
    or
    Caribou Resources Corp.
    Ross Robertson
    President & COO
    (403) 539-4316
    or
    Caribou Resources Corp.
    Suite 1545, 101- 6th Ave SW
    Calgary, Alberta T2P 3P4
    Website: www.cariboures.com