Cordero Energy Inc.
TSX : COR

Cordero Energy Inc.

June 28, 2005 13:31 ET

Cordero Energy Inc. Completes Private Placement and Updates Activities

CALGARY, ALBERTA--(CCNMatthews - June 28, 2005) - Cordero Energy Inc. (TSX:COR):

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Cordero Energy Inc. ("Cordero" or the "Corporation") announced today that it has completed its previously announced private placement by issuing 3,000,000 common shares at an issue price of $4.65 per share for total gross proceeds of $13,950,000. The common shares issued pursuant to the private placement have a hold period of four months which expire on October 29, 2005.

The private placement has allowed Cordero to increase its capital budget to $28-30 million for the part year, April 29 (closing of the Plan of Arrangement) to December 31, 2005. The increased budget will fund facilities expansion at Malmo, Alberta and expanded exploration activities to accommodate future growth.

The corporation has achieved its mid-year production guidance of 1,400 boe/d and remains on target to reach a year-end production target of 2,000 boe/d. Cordero has recently completed an 8-well drilling program at Malmo, Alberta targeting coalbed methane ("CBM") and Belly River gas. At this time, 23 wells are awaiting further tie-in and facilities work. An additional 15 wells are planned for the remainder of the year.

Cordero continues to add to its opportunity base in the Malmo area. The Corporation recently acquired 4.3 sections of undeveloped land with CBM and Belly River potential as well as an interest in a gas plant, allowing higher volumes of gas to be produced at preferential processing rates.

Cordero's exploration focus is directed primarily to opportunities in central and northwest Alberta. The Corporation is building its inventory of medium to long-term high impact exploration prospects to complement short-term exploration opportunities along with its CBM and Belly River development plans. Cordero has entered into a seismic review and option agreement on 10 sections of land in northwest Alberta. The option land is contiguous to Cordero's existing land holdings.

Cordero recently disposed of 8,990 acres of non-core lands located in southwest Alberta for net proceeds of $965,000. The Corporation plans to maintain operational focus and will reallocate the funds to its exploration program.

In this release, references to equivalent barrels of oil, or boe, reflect the conversion of natural gas to oil on a 6:1 energy equivalent basis. Such conversion does not reflect economic equivalence of wellhead prices and can be misleading.

The corporate information contained in these pages contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Cordero at the time of preparation, may prove to be incorrect. The actual results achieved in future periods will vary from the information provided herein and the variations may be material. Consequently, there is no representation by Cordero that actual results achieved during future periods will be the same in whole or in part as the information contained herein.

Cordero is an independent exploration and development company pursuing conventional oil and natural gas production and reserves as well as coalbed methane development in western Canada. Cordero is based in Calgary, Alberta.

The common shares have not been registered under the United States Securities Act of 1933, or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Contact Information

  • Cordero Energy Inc.
    David Elgie
    President and Chief Executive Officer
    (403) 265-7006
    or
    Cordero Energy Inc.
    Dean Setoguchi
    Vice President and Chief Financial Officer
    (403) 265-7006
    Website: www.corderoenergy.com