Berens Energy Increases 2005 Capital Program
Berens Energy Ltd.
|Thursday, August 25, 2005
Berens Energy Ltd. has received approval from its board of directors to increase its 2005 capital program to $26.5 million from the originally approved amount of $20 million. The increase in the capital program reflects the success that Berens has had in accumulating a significant land position in the Karr and Berland River areas of west central Alberta. Berens plans to aggressively pursue drilling opportunities on this 22 section (14 net sections) position characterized by its strong multi-zone natural gas potential.
Berens further announced that it has entered into a bought deal private placement financing agreement with a syndicate of underwriters led by Peters & Co. Limited and including CIBC World Markets and First Associates Investments Inc. The offering will consist of 4,500,000 common shares at $1.95 per common share and 2,000,000 flow-through common shares at $2.45 per share flow-through common share for gross proceeds of $13,675,000. The common shares and flow-through common shares will be issued pursuant to prospectus exemptions available under applicable securities legislation in British Columbia, Alberta and Ontario. The common shares may also be placed privately in the United States with certain qualified institutional buyers pursuant to Rule 144A and with certain accredited institutional investors under Regulation D.
The net proceeds of the offering will be used to fund Berens' increased capital expenditure program in 2005, to fund its 2006 capital expenditure program and for general corporate purposes. Berens will incur Canadian exploration expenses prior to December 31, 2006 in the aggregate amount of not less than the total amount of the gross proceeds raised from the issue of flow-through common shares and renounce the expenditures to the purchasers of the flow-through common shares such that $2.45 per flow-through common share shall be deductible against the subscribers' income for the fiscal year ended December 31, 2005.
Closing of the offering is expected to occur on or about September 12, 2005 and is subject to the receipt of all requisite regulatory and stock exchange approvals. The shares issued pursuant to the offering will be subject to a four-month hold period from the date of the closing of the private placement.