Purcell Energy Ltd.
TSX : PEL

Purcell Energy Ltd.

October 28, 2005 07:00 ET

Purcell Announces Shareholder and Court Approval of Plan of Arrangement to Create Tenergy Ltd. and Point North Energy Ltd.

CALGARY, ALBERTA--(CCNMatthews - Oct. 28, 2005) - Purcell Energy Ltd. (TSX:PEL) ("Purcell") is pleased to announce that it has received shareholder approval at its special meeting held on October 27, 2005 for the previously announced asset sales and plan of arrangement (the "Arrangement") pursuant to which Purcell proposed to sell its Alberta and Saskatchewan producing assets, create Tenergy Ltd. ("Tenergy"), a B.C. focused, deep gas, exploration company, and continue as Point North Energy Ltd. ("Point North"), a gas exploration and production company whose principal asset will be the Fort Liard, N.W.T. gas property. Shareholders of Purcell voted 99.62% in favour of the Arrangement which included approval of the plan of arrangement, the stock option plan of Tenergy, and an initial $5 million private placement by Tenergy Finco Ltd. Purcell has also received approval of the Court of Queen's Bench of Alberta and all other necessary regulatory approvals.

Purcell expects closing of the asset sales on October 28, 2005, the effective date of the Arrangement to be on or about October 31, 2005 and the shares of Point North and Tenergy to begin trading independently under the symbols "PNY" and "TGY", respectively, by Friday, November 4, 2005. Following completion of the Arrangement, Purcell shareholders will retain their Purcell common shares, which will be consolidated on a one-for-five basis and the name of the company will be changed to Point North. For each pre-consolidated Purcell common share held, shareholders will also receive 0.20 of a share in Tenergy. At the same time, and as a result of the asset sales, shareholders will receive a cash payment currently estimated at $0.40 per Purcell common share and 0.0556 of a Prairie Schooner Petroleum Ltd. ("Prairie Schooner") common share (equivalent to one Prairie Schooner share for every 18 Purcell common shares). The exact amount of the cash payment to be made to Purcell's shareholders in connection with the Arrangement will be disclosed, once such calculation has been completed, via press release.

Tenergy

On completion of the Arrangement, Tenergy will be a natural gas-focused junior that will expose its shareholders to significant upside potential as it develops the Tenaka Slave Point project previously conducted by Purcell and pursues its other high-impact deep gas prospects in northeast British Columbia. Purcell's existing management team will continue in Tenergy with Jan Alston as Chief Executive Officer, Bruce Murray as President, Rick Fedoruk as Vice President, Exploration, and Daniel Tiberio as Manager, Operations and Exploitation. Also, Tenergy expects to announce the hiring of a new Chief Financial Officer shortly. Tenergy's board of directors following the Arrangement will be comprised of Murray Todd as Chairman, Jan Alston, Bruce Murray, James Smith, and Harry Wheeler.

Point North

John Emery, Purcell's current Manager, Engineering will lead Point North's management team as President and CEO. Terry Lindquist, Purcell's current Chief Financial Officer, will be Point North's interim Chief Financial Officer during the transition period. Point North expects to announce other new members of the management team in the next few weeks. Point North's board of directors will be comprised of John Emery, John Niedermaier, Dennis Miller, Hugh Gillard and Jan Alston, as Chairman.

The asset sales and Arrangement will restructure the corporate affairs of Purcell to the maximum benefit of our shareholders, while ensuring that our shareholders continue to have the opportunity to profit from the long term potential of our key assets.

This news release contains forward-looking financial and operational information with respect to Purcell, including earnings, cash flow, production, and capital expenditures projections. These projections are based on the Company's expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from forecasts. These risks and uncertainties include general economic, market and business conditions, commodity prices, well production rates, drilling success, timing, the imprecise nature of reserves estimates, service industry conditions, and the successful implementation of the company's business strategy. There is no representation by Purcell that actual results achieved during the forecast period will be the same, in whole or in part, as those forecast.

Contact Information

  • Purcell Energy Ltd.
    Jan Alston
    (403) 269-5803
    or
    Purcell Energy Ltd.
    Bruce Murray
    (403) 269-5803
    or
    Purcell Energy Ltd.
    John Emery
    (403) 269-5803
    www.purcellenergy.com
    or
    Iradesso Communications Corp.
    Peter D. Knapp
    (403) 503-0144 ext. 202