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Petrobank plans spin-off of 21 per cent of Colombia-based Petrominerales
By James Stevenson
CBC
CALGARY
Petroleumworld.com 06 19 06
Petrobank Energy and Resources Ltd. (TSX:PBG) said Monday that it will spin off 21 per cent of 21 per cent of its Petrominerales Ltd. unit in Colombia, raising upwards of $75 million in the initial public offering.Petrobank said it has agreed with Haywood Securities Inc. to issue 20 million shares at $3.75 each - 16 million shares underwritten by Haywood and four million to be sold on a best-efforts basis.
After the initial public offering, Petrobank will retain 78.9 per cent of the 95 million Petrominerales common shares outstanding.
"We've been saying for a long time that if you have a conventional Canadian asset, a heavy-oil business unit and Colombia all under one umbrella, it's hard to find a shareholder who likes all three of those," president and CEO John Wright said Monday.
"When we were a small and compact management group with a small capital budget, it's easy to have a big portfolio of ideas," he said after a presentation at an energy investment symposium in Calgary.
"Now they're real businesses, it unlocks some of the value."
Petrominerales, with production last month averaging 2,588 barrels of oil per day and exploration blocks totalling more than 10,000 square kilometres, intends to use $31.5 million US of the net proceeds for work on current producing properties, $10 million US for exploration drilling, $7 million US to pay debt owed to Petrobank, and the remainder for general and administrative expenses including working capital.
Wright said the small spin-off was not designed to allow Petrobank to exit from Colombia, and his company will still hold about four-fifths of the shares in Petrominerales shares.
"We love the company, but this has allowed it to have its own valuation, its own shareholders - there's people who specifically want international exploration and production."
Calgary-based Petrobank has conventional oil and gas operations, coalbed methane holdings and 84 per cent of the Whitesands oilsands development planned for northern Alberta.
On the Toronto stock market Monday, Petrobank shares fell $1.12 or nearly seven per cent to $15.06 in a down day for the market and energy sector in particular.
CBC
June 12, 2006
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