Transeuro Energy Corp. General Update
(via Thenewswire.ca)
Vancouver, Canada: - Transeuro Energy Corp. ("Transeuro" or the "Company") announces that preparations for the previously announced rights issue are well advanced. The Company has submitted a draft prospectus for review by the Norwegian Financial Supervisory Authority (NFSA) and anticipates filing the preliminary prospectus in Canada next week. The Company further anticipates receiving final approval for both the Norwegian Prospectus and for the Canadian Prospectus in approximately 3 weeks. The subscription period will therefore be conducted from late August to mid September. In preparation for the rights issue the previously announced share consolidation will be completed over the next 2 weeks and a separate news release will be made shortly to announce the relevant dates.
Following the completion of the share consolidation, the Company intends to apply to the TSX Venture Exchange for approval to re-price and extend the 2 sets of outstanding warrants issued by the Company: 11,710,799 that expire on 3rd September 2011 and 25,294,000 issued as part of the January private placement that expire on April 13th 2012. The re-pricing and extension of the warrants is subject to approval from the TSX Venture Exchange and there is no guarantee that such approval will be obtained.
The Company has received funds from a short term loan note of NOK 14.5 million (CAD 2.55 million) under a loan agreement with Norsk Tillitsmann ASA as arranged by Fondsfinans ASA. The note will mature on November 30th 2011 but will be repaid once the proceeds of the rights issue are received. The loan was negotiated at available market rates of 2% per month, with no participation by Company insiders. Funds received will be used for a part payment of outstanding invoices to creditors of the Ukraine Karl-101 drilling and testing programme, and to purchase equipment and services for the planned hydraulic fracturing operations on Karl-101. Planning for the fracturing is well advanced and the Company now expects to perform the operation in October. In connection with the loan the Company has granted a pledge of all of the common shares of its subsidiary, Mattson Holdings Ltd, which is the indirect owner of the Company's Beaver River assets.
The Company has published on its website an updated reserves report on the Beaver River field, dated June 30th 2011 as a requirement of the ongoing rights issue. Activities to install compression at the Beaver River field are ongoing. First phase compression is available now for the A-2 well and will be extended to the A-7 later this year. Phase 2 compression to allow all three wells to produce at low pressures is also ongoing and should be installed and available by the end of the year. Field production is expected to double once phase 2 is completed, that should (dependent on local gas prices) return the field to profitability. Resuming economical production will allow the Company to issue a 51-101 compliant reserves report at year end and the Company is in discussions with a number of third party reserves auditors to prepare a shale gas resource report that will better describe the potential of the field.
Aage Thoen, the Company's Chairman, states: "The rights issue and the short term note have been pursued to allow the Company to fulfill its short term creditor obligations, to preserve the assets and to pursue the next phase of development in both Ukraine and Canada. The rights issue subscription period will likely be conducted during a challenging financial period, but the short term note and the standby guarantee will ensure that the Company can continue to move ahead with all activities The standby guarantee commitment will be correspondingly reduced by funds received from existing shareholders under the rights offering, wherein if the existing shareholders subscribe for the minimum $8,000,000 financing amount, then no shares will be issued to the guarantors.
Transeuro is involved in the acquisition of petroleum and natural gas rights, the exploration for, and development and production of crude oil, condensate and natural gas. The Company's properties are located in Canada and Ukraine. In addition, the Company holds a back-in option to Eaglewood Energy Inc.'s exploration licenses in Papua New Guinea.
On behalf of the Board of Directors
Aage Thoen, Chairman
For further information contact: Chris McGillivray, IR, +1 604 728 0040
Karen Jenssen, IR, +47 91729787
http://www.transeuroenergy.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) nor the Oslo Axess accepts responsibility for the adequacy or accuracy of this release. The statements contained in this release that are not historical facts are forward-looking statements, which involve risks and uncertainties that could cause actual results to differ materially from the targeted results. The Company relies upon litigation protection for forward looking statements.
Copyright (c) 2011 Thenewswire.ca - All rights reserved.
