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$21.5 million before expenses 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 seven rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$6.43.
- each holder of a Class A Common share (“Class A Share”) will receive one right for each Class A Share held and that seven rights will entitle the holder to subscribe for one Class B Share at a price of Cdn$6.43.
The subscription price of Cdn$6.43 represents a 15% discount to the closing price of the Class B Shares on 8 September, 2006. Under the terms of the rights issue, the Company will issue a maximum of approximately 3,345,540 Class B Shares. The non-executive Chairman, David Lyons, who currently holds 3,599,146 Class B Shares and 1,739,275 Class A Shares, has indicated that he will take up his full rights allocation and will give a stand-by commitment to take up such other subscription rights as are not exercised.
The funds will be primarily used to drill a development and exploration well on the Company’s licence acreage in Tanzania during the first half of 2007 to meet the rapidly increasing demand for gas in the country. The funds will also strengthen the Company’s ability to take advantage of additional exploration and development opportunities.
EastCoast Energy Corporation Limited is a TSXV listed company focused on the exploration and production of Tanzanian natural gas and the sale of “Additional Gas” to markets in East Africa. The Company trades on the TSXV 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’s control, including the impact of general economic conditions in the areas in which EastCoast 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, 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 oil and gas operations, therefore EastCoast’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 will derive therefrom.
For further information please contact:
Peter R. Clutterbuck, CEO
+44 (0) 7768 120727
Nigel A Friend, CFO
+255 (0)22 2138737