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November 15, 2004
TSX:TKE
News Release
Calgary, Alberta, November 15, 2004
— TUSK Energy Corporation
("TUSK") is pleased to announce
that it has entered into a bought deal private
placement financing agreement with a syndicate
of underwriters led by Orion Securities Inc. and
including Raymond James Ltd., Peters & Co.
Limited and Canaccord Capital Corporation. Total
gross proceeds are $15,255,000 (the "Offering").
The Offering will consist of 5,000,000 common
shares at $2.15 for gross proceeds of $10,750,000
and 1,700,000 flow-through common shares at $2.65
for gross proceeds of $4,505,000. The Offering
is subject to normal regulatory approval and is
expected to close on or about December 1, 2004.
The net proceeds received by the
Company from the offering of common shares will
be used for working capital and/or expanded capital
expenditures. The net proceeds received by the
Company from the offering of flow-through common
shares will be used to incur Canadian Exploration
Expense. The issue will be offered in Ontario,
British Columbia, Manitoba and Ontario and to
Qualified Institutional Buyers in the United States
pursuant to appropriate registration exemptions.
TUSK is a new exploration and development
company which was formed pursuant to a Plan of
Arrangement (the "Arrangement") which
closed November 2, 2004. The Arrangement resulted
in the reorganization of TUSK Energy Inc. into
TUSK and the TKE Energy Trust. The common shares,
which are listed on the Toronto Stock Exchange,
commenced trading on November 5, 2004 under the
trading symbol "TSK".
Pursuant to the Arrangement, TUSK
has issued approximately 17.7 million common shares.
Pro forma the issue of an additional three million
common shares by way of a private placement approved
as a part of the Arrangement and the issue of
the 6.7 million common shares proposed for the
Offering, the total number of common shares issued
and outstanding will be approximately 27.4 million.
Current corporate production for
TUSK is approximately 200 boepd. The Company anticipates
that net production will increase more than three-fold
to approximately 700 boepd by the end of the year
with the addition of production from recently
drilled wells at Gage, Alberta, from additional
Gage wells currently drilling or to be drilled
and from the start of production from a Devonian
discovery of the Company made by TUSK Energy Inc.
during the 2003-2004 winter drilling season. TUSK
expects to participate in the drilling of up to
15 wells prior to March 31, 2005.
Company Contacts:
Norman W. Holton, Chairman
Gordon K. Case, Vice President, Finance &
Chief Financial Officer
TUSK Energy Inc.
1900, 700-4th Avenue S.W.
Calgary, Alberta
T2P 3J4
Phone: (403) 264-8875
Fax: (403) 264-8861
Web: www.tusk-energy.com
Forward Looking Statements
— Some of the statements contained in this
news release are forward-looking statements. Forward-looking
statements may include, but are not limited to,
statements concerning estimates of recoverable
hydrocarbons, expected hydrocarbon prices, expected
costs, statements relating to the continued advancement
of the Company's projects and other statements
which are not historical facts. When used in this
document, and in other published information of
TUSK, the words such as "could," "estimate,"
"expect," "intend," "may,"
"potential," "should," and
similar expressions are indicative of a forward-looking
statement. Although TUSK believes that its expectations
reflected in the forward-looking statements are
reasonable, the potential results suggested by
such statements involve risk and uncertainties
and no assurance can be given that actual results
will be consistent with these forward-looking
statements. Various factors, which could cause
actual results to differ from these forward-looking
statements, include the potential that TUSK's
projects will experience technical and mechanical
problems, geological conditions in the reservoir
which may negatively impact levels of oil and
gas production and changes in product prices and
other risks not anticipated by TUSK or disclosed
in TUSK's published material. Since forward-looking
statements address future events and conditions,
by their very nature, they involve inherent risks
and uncertainties.
Barrels of Oil Equivalent —
Boe may be misleading, particularly if used in
isolation. A boe conversion ratio of six mcf is
based on an energy equivalency conversion method
primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.
The conversion ratio is an industry accepted norm
and is not based on either energy content of current
prices. |
