Canadian Warrants

To complete this acquisition, Welton obtained $10.5-million of financing from its principal shareholder, Brompton Financial Ltd., and parties related to BFL by way of a 6-per-cent secured note due Dec. 1, 2005, and payment of a 1-per-cent financing fee. Welton will review various alternatives to finance the repayment of this note. However, BFL has agreed that, if Welton elects to repay the note from the proceeds of a rights offering, BFL and its related parties will subscribe for their proportionate share of the rights and, in addition, will subscribe for any rights not subscribed for by other shareholders. While the terms of the rights offering are subject to regulatory approval, Welton and BFL have agreed that shareholders would receive one right for each share held. For each 325 rights, a holder would be entitled to acquire a unit comprising a $100-principal-amount, 8-per-cent secured debenture maturing Dec. 1, 2007, and warrants to acquire common shares of Welton. The purchase price of a unit would be $100. The warrants would be exercisable until Dec. 1, 2008, at a price equal to 115 per cent of the average closing price for the 10 trading days after the announcement of the acquisition subject to a minimum exercise price of $1.50 per share and a maximum exercise price of $1.75 per share. The number of warrants per unit would equal $100 divided by the warrant exercise price (between 57 and 67 shares). Welton has paid BFL a fee of $83,700 for providing this commitment.

This is the second major acquisition completed by Welton in the past 30 days. On Aug. 5, the company completed the acquisition of Infiniti Resources International Ltd. Including both acquisitions, the company is producing approximately 695 boe/d which is expected to rise to approximately 920 boe/d once the nine Bailey wells are brought onto production. In addition to the nine Bailey wells, Welton has seven gross (2.3 net) cased wells waiting to be production tested and tied in for production and two wells currently drilling; one at Chime (21 per cent) and one at Ricinus (9 per cent). Over the next 12 months Welton will continue to develop the over 80 potential drilling locations on its 133,500 gross acres (33,300 net acres) of undeveloped lands focusing on its core areas of Bailey, Majeau and Ricinus. In addition, the company will commence water injections on its significant waterflood project (94.75 per cent owned) in the Brazeau area of Alberta in the fourth quarter of 2005.
 
Welton Energy to list on TSX on Aug. 9
 
2005-08-05 16:51 MT - New Listing
TSX bulletin 2005-0917
An application has been granted for the original listing in the oil and gas category of 40,448,279 common shares of which 33,001,320 shares are issued and outstanding, and 7,446,959 shares are reserved for issuance.
An application has also been granted for the listing of 1,978,709 share purchase warrants, all of which will be issued and outstanding. Each whole warrant entitles the holder to purchase one common share at an exercise price of $1.75 at any time prior to 4:30 p.m. (Toronto time) on Aug. 4, 2007.
The common shares and the warrants will be listed and posted for trading at the open on Tuesday, Aug. 9, 2005. The company will be subject to the reporting requirements of Section 501 of the Toronto Stock Exchange company manual.
Stock symbols
 
Common share symbol:  WLT
Common share Cusip No.:  950456 10 3
 
Warrant symbol:  WLT.WT
Warrant Cusip No.:  950456 11 1
 
Designated market-maker:  W.D. Latimer Co. Ltd.
Other markets:  None
Listing statement No. 5639 is being prepared and the following constitutes information appearing in the statement.
Fiscal year-end:  Dec. 31
 
Nature of business:  The company's focus is oil, natural gas and related liquids and condensate production in nine core areas in west-central to northwestern Alberta, and northeastern British Columbia. Its operations commenced in 2003 and are carried out under joint venture arrangements with several industry partners. In 2004 it participated in the drilling of 15 wells, which resulted in nine successful gas wells and five dry holes. Current landholdings total 27,000 net acres.
 
Transfer agent and registrar:  CIBC Mellon Trust Co., Toronto, Ont.
Share capital
Authorized:  Unlimited common shares and 1,978,709 common share purchase warrants
 
Issued:  33,001,320 common shares and 1,978,709 warrants
 
Reserved:  five million common shares issuable pursuant to the company's stock option plan, of which 2,455,000 options have been granted between Sept. 10, 2003, and May 11, 2005, at prices ranging from 27 cents to $1.50 per common share expiring between Sept. 9, 2008, and May 10, 2010. Pursuant to the plan of arrangement with Infiniti Resources International Ltd., there are also 268,000 options outstanding that are held by former Infiniti optionholders exercisable at prices ranging from 75 cents to $1.175 per common share. These options expire on Nov. 2, 2005;
 1,978,709 common shares issuable upon the exercise of warrants. Each warrant entitles the holder to purchase one common share at an exercise price of $1.75 per share at any time prior to 4:30 p.m. (Toronto time) on Aug. 4, 2007;
 156,250 common shares issuable upon the exercise of warrants. Each warrant entitles the holder to purchase one common share at an exercise price of 80 cents on or before Feb. 13, 2006; and
 312,000 common shares issuable upon the exercise of warrants. Each warrant entitles the holder to purchase one common share. 264,000 warrants are exercisable at $1.50 and 48,000 are exercisable at $1.25. These warrants expire on Nov. 23, 2005.
 
Dividends:  The company does not intend paying dividends at this time.