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

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

The Special Committee, chaired by Board of Directors ChairmanDick Aberg, is expected to receive bids by mid-August. “To date,without a solicitation process, we have had a gratifying number ofparties express an interest in attending the data room,” saidGardner. “The initial documents have just been released and weanticipate that there will be additional interest expressed beforewe open for business on June 14.”

Rigel President and CEO Don West, who will be retiring uponcompletion of the Special Committee process said, “It’s been a longtime since a company with such a powerful combination of valuableassets and tremendous upside potential became available in theCanadian oil patch. Any suitor interested in pursuing Rigel willquickly recognize the value and potential we have created over thepast 20 years.”

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

Rigel has three geographically defined business units: thePeace River Arch, Western Canada, and International. Centered inthe Western Canada Sedimentary Basin, the Peace River Arch is alower risk, multi-zone exploitation area that accounts for morethan two-thirds of Rigel’s gas production. The Western Canadabusiness unit focuses on high-impact natural gas exploration andlower risk crude oil exploitation.These business units provide astrong financial operating base for Rigel’s expanding internationalpresence in the UK North Sea through its wholly owned subsidiary,Rigel Petroleum UK Limited.

Ellen Beswick

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