Gauntlet Energy completes sales of seismic assets, coalbed methane rights

Don Whiteley

Petroleum News Contributing Writer

Gauntlet Energy Corp. has completed the sale of seismic assets and coalbed methane rights for $7.8 million, substantially all of which will be used to reduce the outstanding secured debt of the principal lender of the corporation to approximately $38 million.

Ketch Resources Ltd. has agreed to subscribe for first preferred shares, series A of Gauntlet, which will represent all of the issued and outstanding common shares, for $44.6 million, as adjusted for working capital.

The completion of the transaction with Ketch is subject to numerous conditions including that a plan under the Companies Creditors’ Arrangement Act which is satisfactory to Ketch, is approved by the secured creditors, the unsecured creditors and the court and that ongoing legal actions are resolved to Ketch’s satisfaction. Gauntlet has also agreed to cease solicitations of any sales of further assets of the corporation or the sale of the corporation.

The completion of the asset sales and the agreement with Ketch provides additional certainty that a plan under the CCAA will be proposed to the secured creditors and unsecured creditors of Gauntlet in November 2003, with creditors meetings to be held in early December and the effective date of the plan to be in mid-December.