22 November 2004
EastCoast Energy announces its intention to raise approximately Cdn$ 5 million through a rights issue
TORTOLA, British Virgin Islands -- EastCoast Energy Corporation ("EastCoast Energy" or the "Company") announces that the Board of Directors has approved, in principal, the raising of approximately Cdn$ 5 million by means of a rights issue. The transaction will require the approval of the TSX Venture Exchange ("TSXV").
It is intended that:
- each holder of a Class B Subordinated Voting share ("Class B Share") will receive one right for each Class B Share held and that ten rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$ 2.60.
- each holder of a Class A Common share ("Class A Share") will receive one right for each Class A Share held and that ten rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$ 2.60.
The subscription price of Cdn$ 2.60 represents a 15 % discount to the closing price of the Class B Shares on 19 November, 2004.
Under the terms of the rights issue, the Company will issue a maximum of 2,113,743 Class B Shares. The non-executive Chairman who currently holds 3,104,745 Class B Shares and 1,739,175 Class A Shares, has indicated that he will take up his full rights allocation.
The funds will primarily be used to develop the Company's existing gas assets in Tanzania and to pursue new options for growth.
EastCoast Energy Corporation Limited is a TSXV listed company focused on the production of Tanzanian natural gas and the sale of "Additional Gas" to markets in East Africa. The Company was spun out from PanOcean Energy Corporation and began trading on the TSXV as a separate public company on 31 August 2004 under the trading symbols ECE.B and ECE.A. The company is headquartered in Tortola, British Virgin Islands and maintains its operations offices in Dar es Salaam, Tanzania.
Forward Looking Statements
This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond EastCoast Energy's control, including: the impact of general economic conditions in the areas in which the Company operates, civil unrest, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, government intervention, third party contractual behaviour, the speed at which gas markets develop, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition there are risks and uncertainties associated with operating a limited number of producing wells and gas related infrastructure, therefore EastCoast Energy's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that EastCoast Energy will derive therefrom.
For further information please contact:
W. David Lyons, Chairman
+255 (0)22 2138737
Nigel A Friend, CFO
+255 (0)22 2138737