EnerMark Income Fund of Calgary offered to acquire all shares ofWestern Star Exploration Ltd. by way of a take-over bid. WesternStar assets are mainly producing gas properties concentrated in theHanna, Taber and Thornbury areas of Alberta. EnerMark’s estimate ofWestern Star’s proven reserves total 36,855 MMcf of gas and 147MBoe of crude oil and gas liquids. These reserve volumes includethe results of a successful 21-well gas development program atHanna Garden.
The company has a strong reserve life Index of 15 years, and onan established basis, reserves total 4,345 MBoe. Production is at arate 7,140 Mcf/d of gas and 66 B/d of crude oil and liquids.Operating costs during the first nine months of 1999 were$4.58/Boe. The Western Star assets offer a significant number oflow-risk, in-fill gas drilling opportunities scheduled for drillingin 2000.
Shareholders of Western Star will have the option to take $1.80in cash or 0.48 of an EnerMark Trust Unit and 0.75 of a warrant topurchase additional EnerMark trust units at an exercise price of$4.00 at any time until the close of business Dec. 31. There are12,026,000 Western Star issued and outstanding.
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