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.
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