Dundee Energy Limited

Dundee Energy Limited

June 08, 2012 17:01 ET

Dundee Energy Announces Delays to Castor Project in Spain

TORONTO, ONTARIO--(Marketwire - June 8, 2012) - Dundee Energy Limited ("Dundee Energy" or the "Corporation") (TSX:DEN) previously indicated that the Government of Spain recently promulgated regulatory changes containing modifications to the remuneration regime applicable to underground gas storage facilities. Escal UGS SL ("Escal"), the owner of the Castor Underground Gas Storage Project (the "Castor Project"), has been in continuing discussions with the relevant authorities to evaluate the impact of the regulatory changes on the Castor Project economics, and the related project financing. As a result of these discussions, Escal has determined that the regulatory changes have an unfavourable impact to the Castor Project economics and the project financing, resulting in the Government of Spain entering into discussions with Escal with a view to finding solutions that would re-establish the economic value of the project. Such discussions are ongoing, with the full knowledge and involvement of the lenders to the project. Accordingly, further borrowings pursuant to project financing arrangements have been deferred until a satisfactory agreement has been reached between all parties.

In the interim, Escal is continuing with the process of obtaining the provisional commissioning certificate necessary to commence the injection of cushion gas into the Castor facilities, which Escal anticipates receiving prior to the end of the second quarter or early in the third quarter. For that reason, and pending a satisfactory outcome to the regulatory discussions, Escal has chosen to defer the acquisition of cushion gas.


Dundee Energy Limited (formerly "Eurogas Corporation") is a Canadian-based oil and natural gas company with a mandate to create long-term value for its shareholders through the exploration, development, production and marketing of oil and natural gas, and through other high impact energy projects. Dundee Energy holds interests, both directly and indirectly, in the largest accumulation of producing oil and gas assets in Ontario, in the development of an offshore underground natural gas storage facility in Spain and, through a preferred share investment, in certain exploration and evaluation programs for oil and natural gas offshore Tunisia. The Corporation's common shares trade on the Toronto Stock Exchange under the symbol "DEN".


Certain information set forth in these documents, including management's assessment of each of the Corporation's future plans and operations, contains forward looking statements. Forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" or similar expressions. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including, in particular, regulatory changes promulgated by the Government of Spain, as well as: exploration, development and production risks; uncertainty of reserve estimates; reliance on operators, management and key personnel; cyclical nature of the business; economic dependence on a small number of customers; additional funding that may be required to execute on exploration and development work; the ability to obtain, sustain or renew licenses and permits; risks inherent to operating and investing in foreign countries; availability of drilling equipment and access; industry competition; environmental concerns; climate change regulations; volatility of commodity prices; hedging activities; potential defects in title to properties; potential conflicts of interest; changes in taxation legislation; insurance, health, safety and litigation risk; labour costs and labour relations; geo-political risks; risks relating to management of growth; aboriginal claims; volatility of the Corporation's share price; royalty rates and incentives; regulatory risks relating to oil and natural gas exploration; marketability and price of oil and natural gas; failure to realize anticipated benefits of acquisitions and dispositions; information system risk; and other risk factors discussed or referred to in the section entitled "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2011.

Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. The Corporation's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive from them. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

  • Dundee Energy Limited
    c/o Dundee Corporation
    21st Floor, Dundee Place
    1 Adelaide Street East
    Toronto, ON M5C 2V9

    Dundee Energy Limited
    Jaffar Khan
    President & CEO
    (403) 264-4985
    (403) 262-8299 (FAX)