Watch Resources Begins Production Fishing Lake
|Monday, April 05, 2004
Watch Resources has equipped and tied-in its two natural gas wells drilled in late 2003 on the Fishing Lake property in Alberta. The wells have stabilized gross aggregate production of 1.25 million cubic feet of gas per day, and are delivering to a sales pipeline through third party compression and dehydration facilities. Estimated reserve life for the two wells is five to seven years. The Company has an average 87.5% working interest in the two wells.
The wells are the first of numerous identified targets in the Company's joint venture with the Fishing Lake Metis Settlement. Based on its evaluation of trade seismic data conducted late last year, Watch expects to begin an aggressive exploration and development program at Fishing Lake, which will likely include a 45-km 2D seismic shoot, land acquisition, and the drilling of several natural gas and/or oilsands exploration wells.
The facilities and pipeline were funded through the completion of a non-brokered private placement of a convertible debenture in the principal amount of CDN$1,000,000 with Quest Capital Corp. The debenture matures two years from the date of issue and is convertible, at the option of Quest, into common shares of the Company at the rate of one common share for every $0.25 of principal. Any shares issued pursuant to the conversion of the debenture will be subject to a four month hold period commencing on the date of issuance of the debenture. Interest is payable on the principal amount of the debenture at the rate of 6 percent per annum, calculated and payable monthly not in advance.
The debenture is secured by a first charge security interest over all of the present and after-acquired personal property of the Company and a fixed and floating charge on the Company's real property, including its interests in the Fishing Lake petroleum and natural gas property.
No bonus or finder's fee is payable in connection with the convertible debenture.
The balance of proceeds from the private placement will fund the Company's ongoing exploration, development and production expenses in connection with its Fishing Lake property and for general working capital.