Purcell Energy Ltd.

Purcell Energy Ltd.

November 03, 2005 07:00 ET

Purcell 'Point North Energy' and Tenergy Announce Completion of Asset Sales and Plan of Arrangement

CALGARY, ALBERTA--(CCNMatthews - Nov. 3, 2005) - Purcell Energy Ltd. ("Purcell") (TSX:PEL) and Tenergy Ltd. ("Tenergy") jointly announce that further to the announcement of Purcell dated October 28, 2005, the previously disclosed asset sales have been completed and the plan of arrangement (the "Arrangement") involving Purcell, Tenergy, Tenergy Finco Ltd. and the shareholders of Purcell and Tenergy Finco Ltd. closed effective November 2, 2005.

Effective October 28, 2005 Tenergy Finco Ltd. closed a $5 million private placement of 1,428,572 common shares at $3.50 per share and 714,286 share purchase warrants exercisable at $4.20 per share for two years. The private placement is subject to a one-year hold period. Pursuant to the Arrangement, the Tenergy Finco Ltd. shares and warrants were exchanged for an equal number of shares and warrants of Tenergy. After the private placement, Tenergy has no debt and approximately $2 million in cash.

As a result of the closing of the Arrangement, the name of Purcell has been changed to Point North Energy Ltd. ("Point North"). Purcell shareholders will exchange their Purcell common shares, which are to be consolidated on a one-for-five basis, for shares of Point North. In connection with the Arrangement, Purcell has confirmed that the cash distribution amount will be $0.40 per share. Also, for each pre-consolidated Purcell common share held, shareholders will receive either 0.20 of a share in Tenergy or a cash payment equal to $0.61833, depending on the election made by each shareholder. At the same time, shareholders will receive the cash payment of $0.40 per Purcell common share and 0.0556 of a Prairie Schooner Petroleum Ltd. ("Prairie Schooner") common share (equivalent to approximately one Prairie Schooner share for every 18 Purcell common shares).

As a result of the closing of the Arrangement, Purcell shareholders will benefit as follows:

- Continued exposure to the upside potential of Purcell's Alberta assets through ownership of Prairie Schooner shares;

- Continued exposure to the upside potential of the Tenaka natural gas play through ownership of Tenergy, a British Columbia focused exploration company;

- Ownership of Point North, a debt-free company with new management that will focus on maximizing the value of Purcell's Fort Liard natural gas property; and

- Proceeds from the disposition of assets will enable payment of all debt and costs of the reorganization, as well as provide for payment of the above-noted cash distribution to shareholders.

Pursuant to the asset sales, Purcell has sold all of its Saskatchewan assets and substantially all of its Alberta assets for total consideration of $151 million. A portion of the consideration for the Alberta assets has been satisfied by the issuance of 2,800,340 common shares of Prairie Schooner.

Tenergy is pleased to announce that Mr. Douglas A. Alder has been appointed as Chief Financial Officer of Tenergy. Mr. Alder joins Tenergy from his recent role as a senior manager with a major international accounting firm. Mr. Alder received a Bachelor of Commerce degree from the University of Calgary and he is a Chartered Accountant. He has eleven years of financial reporting and accounting experience. Mr. Alder has broad experience in the oil and gas industry, public markets and the implementation of initiatives to enhance operational performance.

Registered shareholders must submit the Letter of Transmittal that accompanied Purcell's Information Circular to Olympia Trust Company together with their Purcell share certificates in order to receive their cash distribution, as well as their Point North, Tenergy and Prairie Schooner share certificates. Non-registered shareholders, being those whose shares are held on their behalf by a nominee (i.e. broker, trust company, bank or other registered holder) are advised to contact their nominee to confirm the exchange. A copy of the Letter of Transmittal can be downloaded from SEDAR at www.sedar.com.

Purcell expects the shares of Point North (formerly, Purcell) and Tenergy to begin trading independently under the symbols "PNY" and "TGY", respectively, on or about November 7, 2005.

Contact Information