Twin Butte Energy Ltd.

June 12, 2006 18:03 ET

Twin Butte Energy Ltd. Announces Closing of Strategic Acquisitions and Commencement of Trading

CALGARY, ALBERTA--(CCNMatthews - June 12, 2006) - TWIN BUTTE ENERGY LTD. (TSX VENTURE:TBE) ("Twin Butte" or the "Company") is pleased to announce that it has completed the previously announced acquisitions of each of Drilcorp Energy Ltd. and Kerogen Petroleum Ltd., which have now been wound up into Twin Butte such that Twin Butte now owns all assets formerly owned by Drilcorp and Kerogen.

To complete the above transactions, Twin Butte has issued a combination of cash and Twin Butte shares. It is anticipated that the shares of Twin Butte will commence trading on the TSX Venture Exchange, Inc. under the symbol TBE on or about June 13, 2006.

The Company is well capitalized with a $17 million bank line from a major Canadian Institution and current debt of less than $4 million. Current production is approximately 1100 BOEPD comprised of 70 percent natural gas and 30 percent light oil and NGL's. Twin Butte is initially setting an annual exploration and development capital budget of $10 million and, with tax losses in excess of $100 million, the Company is well positioned to pursue an aggressive acquisition strategy in addition to the base capital program. Based on December 31, 2005 independent engineering, the Company has a pro forma net asset value of approximately $0.80 per fully diluted share. The combined Company currently has outstanding 86,007,529 common shares, warrants to acquire 10,255,878 common shares at exercise prices ranging from $0.40 to $0.43 per share, and options to purchase an additional 8,100,000 shares, each at an exercise price of $0.80 per share.

Twin Butte's core areas of operation are focused in East Central Alberta at Bruce, Bulwark and Oyen and in North Western Alberta at Jayar. Multiple drilling opportunities have been identified in these core areas with a East Central shallow drilling program anticipated in Q3 and a North Western deep well program planned for late Q3 and Q4.

Twin Butte is also pleased to announce the appointment of three key executives.

Ron Cawston has been named President and Chief Executive Officer. Ron is a Professional Engineer with 18 years of varied oil and gas experience with Chevron Canada Resources, Penn West Petroleum, Equatorial Energy and Kerogen Petroleum.

Brian Dunn has been named Vice President, Engineering and Corporate Development. Brian is a Professional Engineer with 15 years of varied oil and gas experience with Norcen Energy Resources, Penn West Petroleum, Waterous & Co. and Ross Smith Energy Group.

Ivan J. Condic has been named Controller. Ivan is a Chartered Accountant with 9 years of varied experience at KPMG, Precision Drilling, Enbridge and Kerogen Petroleum.

The Board of Directors of the Company is comprised of Paul Colborne, Jeff Lawson, Ken Mullen, Robin Salmon, Jim Saunders and Ron Cawston. Directors, officers and the management team of the Company currently own approximately 27% of the outstanding common shares of the Company on a fully diluted basis.

At the Twin Butte Annual and Special meeting of shareholders held June 6, 2006, shareholders approved a 5:1 share consolidation. The Company anticipates implementing this consolidation upon listing of the Company's common shares on the Toronto Stock Exchange, which we anticipate would occur later this year.

The management and Board of Directors of Twin Butte are excited about the new Company and opportunities the Company plans to execute over the next six months. The experienced management team, combined with a strong Board of Directors, positions the Company well for future success.

Forward-Looking Statements

Certain information set forth in this press release, including a discussion of future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond management's control, including but not limited to, the impact of general economic conditions, industry conditions, fluctuation of commodity prices, fluctuation of foreign exchange rates, environmental risks industry competition, availability of qualified personnel and management, stock market volatility, timely and cost effective access to sufficient capital from internal and external sources. Actual results, performance or achievement could differ materially from those expressed in or implied by these forward-looking statements.

The TSX Venture Exchange, Inc. has neither approved or disapproved of the contents of this press release.

Contact Information

  • Twin Butte Energy Ltd.
    Ron Cawston
    President and Chief Executive Officer
    (403) 215-2040