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.
The company ranked 26th among Canadian producers with an average 155 MMcf/d of gas production and 491 Bcf of gas reserves and 38.6 million barrels of oil reserves in Canada in 1998. Its Canadian production was 55% gas. The company also produced 8,200 b/d of oil from the North Sea in the United Kingdom and had a 11.1 million barrel foreign reserve in 1998.
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 14th."
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.
An industry observer said several Canadian producers currently are being shopped as owners seek to monetize assets which have increased in value as the demand for Canadian gas increases.
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