Cougar O&G provided an update to the financing of the previously announced Q1, 2011 Trout core area multi-well drilling program and 3D seismic program.
The previously announced 23.8Km2 high resolution 1.1 million dollar 3D seismic program was financed by the exercise of warrants by some the original investors in Cougar Energy, Inc. This seismic data will provide the Corporation with the detailed geophysical information needed to support the geological selection of the drilling programs which will be executed over the next 18 to 24 months.
The previously announced 3.5 million multi-well drilling program has been financed with two convertible notes. The first note of $900,000 from Kodiak Energy, Inc.The 18 month term unsecured note with an interest rate of prime plus 3%, and no early payment penalties is convertible by Kodiak at the higher share price of $3.00 or the 5 day volume weighted average at day of funding which was February 1, 2011. Kodiak also earns a 1% Gross Override Royalty on the production from the two wells drilled with these funds. The second unsecured convertible note of up to 5 million Cdnis for an 18 month term with prime plus 3% and no early payment penalties from Zentrum Energie Trust SA. The note is convertible at $3.00 with signing February 3, 2011. The conversion also comes with a warrant at 130% of signing price if converted and a forced conversion if the share price trades at 200% above signing for 20 days. Additional details are available in our filings.
The drilling rig is expected to mobilize to the project area by the middle of February, 2011.
Mr. William Tighe, CEO and Chairman of the Board for Cougar stated, 'We are pleased to complete the financing for the 5.2 million 2011 Q1 work programs with nominal dilution or less than 2% based on current shares issued and outstanding if fully converted.
"For those interested in the seismic program and drilling programs - we have added and will continue to add pictures to the web site which were taken recently from the programs."
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