SignalEnergy Inc.

May 03, 2005 23:59 ET

Signal Announces Closing of the Twining Disposition for $13.25 million

CALGARY--(CCNMatthews - May 3) - SignalEnergy Inc is pleased to
announce the closing of the previously announced disposition of its
Twining property. Signal received $13.25 million of proceeds which will
be used fund a $17.5 million capital expenditure program. The Twining
property consisted of 8,160 net acres of undeveloped land, and 1.0
mmcf/d of natural gas production representing 12% of Signal's total
production capacity. The delays of obtaining commingling approval from
the Alberta Energy Utility Board to allow for natural gas production
from Edmonton sand and Horseshoe Canyon coals, increased competition in
the area making additional land purchases in the area more difficult
and the attractive purchase price relative to its investment has
resulted in the sale of the property.

The proceeds from the sale will result in the company having
approximately $1.5 million of debt, bank lines in excess of $15 million
and annualized cash flow of approximately $11 million.

Signal's 2005 plans involve completing approximately 30 well operations
consisting of nine completions and drilling 21 wells with an average
working interest of approximately 70%. If the program is successful it
will result in establishing in excess of 10 additional drilling
locations. Capital expenditures for the remainder of the year are
estimated to be $17.5 million which could be expanded to $25 million
depending on drilling success.

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