"Petrobank Energy and Resources Ltd. ("Petrobank") (PBG) is pleased to announce that Petro International Ltd. (the "Selling Shareholder") has entered into an agreement with a syndicate of investment dealers, led by TD Securities Inc. and Haywood Securities Inc. (the "Underwriters"), pursuant to which the Underwriters have agreed to purchase for resale to the public, on a "bought deal" basis, an aggregate of 9.9 million common shares ("Common Shares") of Petrominerales Ltd. ("Petrominerales") from the Selling Shareholder at a price of $10.25 per Common Share resulting in gross proceeds of $101,475,000 (the "Secondary Offering")..."
..."The Secondary Offering will reduce Petrobank's ownership of Petrominerales to 66.7% and is expected to enhance the market liquidity of Petrominerales through an increased public float. The proceeds from the offering will further improve Petrobank's balance sheet strength and financial flexibility by reducing bank debt outstanding and potentially lead to an expanded 2009 drilling program focused on the Bakken light oil play in southeast Saskatchewan."
PBG's financial situation was pretty tight before this transaction with only 30 million dollars in available credit and the obvious way out of the credit squeeze was the sale of the most liquid asset they had. Coincidentally(?) Petrominerales announced earlier yesterday that its new CORCEL-D3 well had come online with the daily production volume of 8400 barrels of medium gravity crude oil per day.
Based on recent corporate presentations it seems that the Bakken and the Eastern Montney are the only unconventional Canadian plays that are clearly profitable with todays oil and natural gas prices(Galleon Energy says that E-M is "profitable at $3 CDN/Mcf gas price"). So if PBG is going use a portion of the proceeds to drill new wells the Bakken is the on only place their asset portfolio where drilling is economic at the moment. Me thinks.
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