Canada's Antrim Energy withdraws proposed offering of up to $100 million of convertibles

By Rebecca Melvin

New York, June 2 - Antrim Energy Inc. has withdrawn its proposed private placement of up to $100 million of senior unsecured convertible debentures due to "the relatively high cost in terms of market interest rates and conversion price," the company said Monday in a news release.

The Calgary, Alta.-based oil and gas exploration company announced last Thursday that it had agreed to sell $100 million of convertible debentures via a syndicate of agents co-led by Wellington West Capital Markets and RBC Capital Markets.

The bonds were being offered in the United States under Rule 144A.

Proceeds had been proposed to be used primarily to accelerate appraisal and development on its recently drilled Fyne Field. But now the appraisal of the field will proceed as previously planned, with drilling the first well in July or August and additional drilling to follow up in 2009. First production from Fyne is expected in 2010.

Regarding Antrim's Causeway property in the northern North Sea, plans remain unchanged, with drilling of the next well scheduled to start in mid-June.

Causeway appraisal and development is funded to first production given Antrim's $70 million in current working capital and a previously announced $50 million working capital facility and proposed $150 million bank debt facility upon approval of the Causeway field development plan.

"We had anticipated proceeds from the debenture issue would allow the company to accelerate the appraisal and development of the Fyne discovery. However, the terms offered in this current debt market would not have been in the best interests of Antrim's shareholders and the company has elected not to accept the offering," president and chief executive Stephen Greer stated in the release.

"Antrim will proceed with the development of the Fyne oil field under previously announced plans and anticipates that the Fyne development will proceed under senior bank debt, similar to that arranged for the Causeway property. In the meantime the company remains well-financed and will proceed with its current drilling plans," Greer said.

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