NGI The Weekly Gas Market Report / NGI All News Access

Canadian Rigel Energy on the Market

Canadian Rigel Energy on the Market

Rigel Energy Corp. of Calgary, a medium-sized Canadian producer, is opening a data room June 14 to solicit proposals from parties interested in "making an investment in the equity of the corporation, merging with the corporation, acquiring certain of Rigel's assets, or making an offer for 100% of the corporation," according to Don Gardner, Rigel's chief financial officer. A special committee has been appointed to conduct the process which "will be broad, open and transparent," Gardner told the company's annual meeting June 2.

Rigel has a capitalization of approximately $600 million and 200 employees. It has more than doubled in size over the last two years and says revenues were in excess of $275 million in 1998. The company ranked 26th among Canadian producers with an average 155 MMcf/d of natural gas production and 495 Bcf of proved gas reserves in Canada. Its Canadian production is about 55% gas. Oil and liquids production averaged about 23,000 b/d through September 1998 with a substantial portion of that coming from the North Sea. Rigel suffered a $76.5 million loss in 1998 mainly due to a write-down of its 1997 North Sea acquisitions.

The Special Committee, chaired by Board of Directors Chairman Dick Aberg, is expected to receive bids by mid-August. "To date, without a solicitation process, we have had a gratifying number of parties express an interest in attending the data room," said Gardner. "The initial documents have just been released and we anticipate that there will be additional interest expressed before we open for business on June 14."

Rigel President and CEO Don West, who will be retiring upon completion of the Special Committee process said, "It's been a long time since a company with such a powerful combination of valuable assets and tremendous upside potential became available in the Canadian oil patch. Any suitor interested in pursuing Rigel will quickly recognize the value and potential we have created over the past 20 years."

John Hodgins, chief operating officer, cited the corporation's robust exploration program in western Canada as being among the operating highlights in 1998. Rigel replaced 230% of its 1998 natural gas production from the Western Canadian Basin and 112% of production from the Peace River Arch.

Rigel has three geographically defined business units: the Peace River Arch, Western Canada, and International. Centered in the Western Canada Sedimentary Basin, the Peace River Arch is a lower risk, multi-zone exploitation area that accounts for more than two-thirds of Rigel's gas production. The Western Canada business unit focuses on high-impact natural gas exploration and lower risk crude oil exploitation.These business units provide a strong financial operating base for Rigel's expanding international presence in the UK North Sea through its wholly owned subsidiary, Rigel Petroleum UK Limited.

Ellen Beswick

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus