Kootenay Energy Inc.

Kootenay Energy Inc.

November 18, 2005 17:21 ET

Kootenay Completes Strategic Acquisition of Additional Southeast Saskatchewan Assets

CALGARY, ALBERTA--(CCNMatthews - Nov. 18, 2005) - Kootenay Energy Inc. (TSX VENTURE:KTY) (the "Corporation") is pleased to announce that it has concluded the previously announced purchase of certain high quality, long life, light oil assets strategically located in the Corporation's key operating area of southeast Saskatchewan. As a result of due diligence, the aggregate purchase price was revised slightly downward to $2,000,000 as opposed to the previously announced purchase price of $2,115,000, to accommodate estimated production of approximately 53 boe/d as opposed to the previously announced 58 boe/d of light oil and natural gas. The purchase price consisted of $1,300,000 in cash and the issuance of 700,000 common shares of the Corporation having the deemed issue price of $1.00 per common share, subject to closing adjustments. These common shares are subject to a four (4) month hold period expiring on March 15, 2006.

Subject to continued drilling success and strategic acquisitions, the Corporation anticipates exiting 2005 with production of more than 225 boe/d. The Corporation is also upwardly revising its 2006 average daily production estimate to 265 boe/d with an estimated exit rate of 290 boe/d. This revised 2006 production estimate will result in cash flow of more than CAN $3,000,000 based on US $55.00 WTI and CAN $8.50 AECO/mcf pricing, or 2006 estimated cash flow per common share of $0.16.

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Corporation's control, including: the impact of general economic conditions in Canada, industry conditions, increased competition, the lack of available qualified personnel or management, equipment failures, fluctuations in product prices and in foreign exchange or interest rates and stock market volatility. The Corporation's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances 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 there from.

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

Contact Information

  • Kootenay Energy Inc.
    Mark A. Naylor
    President and Chief Executive Officer
    (403) 355-9800
    Kootenay Energy Inc.
    #520, 815 - 8th Avenue S.W.
    Calgary, Alberta T2P 3P2