EnerMark Income Fund to bid for EBOC Energy

EnerMark Income Fund, Calgary, said it agreed to make a takeover bid through a subsidiary to acquire EBOC Energy Ltd., a private oil and gas producer also based in Calgary. The acquisition would cost EnerMark $155 million (Can.) in cash and assumption of debt.


EnerMark Income Fund, Calgary, said it agreed to make a takeover bid through a subsidiary to acquire EBOC Energy Ltd., a private oil and gas producer based in Calgary, Alberta. The acquisition would cost EnerMark $155 million (Can.) in cash and assumption of debt.

About 60% of EBOC's reserves are concentrated in the Benjamin Creek/Hunter Valley area 60 miles northwest of Calgary. EBOC is producing 4,000 boe/d; the acquisition would increase EnerMark's production by 17%. EnerMark said EBOC production is restricted by existing infrastructure.

As a condition of the offer, EnerMark will receive lock-up agreements on 100% of the EBOC shares. Under certain circumstances, EnerMark would receive a $4 million (Can.) compensation fee if the acquisition does not take place.

The acquisition is expected to close Sept. 1, 2000, with adjustments made effective June 1, 2000.

EnerMark is planning to build a new pipeline to a sour gas facility it says is underutilized.

About 40% of EBOC's current natural gas production is available for sale on the spot market.

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