11th Jan 2006 08:10
Crosby Capital Partners Inc11 January 2006 Crosby Capital Partners Inc. ("Crosby" and together with its subsidiaries the "Crosby Group") IB Daiwa Corporation ("IB Daiwa") Announces Gas Discovery at Kami IB Daiwa (Stock Code: JP 3587) has today announced the success of the Kami well.An English translation of the full text of the announcement made by IB Daiwa isavailable on IB Daiwa's website (www.ibdaiwa.co.jp). The Crosby Group currently holds 56,325,000 shares in IB Daiwa, which represents16% of its current issued share capital. The Crosby Group also holds warrants tosubscribe for a further 64,600,000 shares that once exercised would provide theCrosby Group with a 28% interest in IB Daiwa on a fully diluted basis. Important Gas Discovery at Kami Lodore Resources Inc. ("Lodore"), a wholly owned subsidiary of IB Daiwa, has a75% working interest in a number of high quality prospects in Louisiana andTexas, in the United Sates. The Kami well was the first of these prospects to bedrilled and, following the drilling reaching the well's target depth, thequantum of reserves have been evaluated and it has been established that thereservoir of gas tapped by the well is commercially exploitable. Although a formal reserves audit has not yet been performed pending thecommencement of production, on the basis of the above evaluation and current gasprices, Lodore have calculated that the Kami well is expected to generate totalrevenues over its life of over US$75 million, commencing from Q2 2006. IBDaiwa's share of future costs is estimated to be only US$2 million. IB Daiwa have estimated that, at current gas prices, its existing productionfrom Louisiana is estimated to generate annual revenues of approximately US$40million. Simon Fry, Chief Executive Officer, commented "The discovery at Kami is asignificant milestone for IB Daiwa which is now a fully fledged naturalresources company. IB Daiwa not only has significant producing assets via itsrecent acquisition of Darcy Petroleum but has now managed to transform the firstof its exploration assets into a producing asset to further enhance theportfolio. These producing assets are expected to make IB Daiwa profitable forthe first time in its recent history and will generate cash flow that will beavailable for the ongoing development of its significant portfolio ofexploitation and exploration assets. As the huge potential of IB Daiwa's highquality exploration portfolio and the recurring earnings from Kami and Darcybecome more apparent, the Crosby Group, together with the other IB Daiwashareholders, should expect to benefit from a significant re-rating of IB Daiwain the Japanese stock market. The combination of IB Daiwa's producing assets andexploration portfolio I believe is unique for a Japanese company and with itsreturn to profitability it is on course to become a significant player in theJapanese capital markets." Mr Fry added "our experience of working with IB Daiwa has been very positive,and I cannot emphasise enough to our shareholders the potential that exists fora very significant increase in the value of our stake. Whilst there can be nodoubt that even at the current price levels, our current holding in IB Daiwa isvery important for the Crosby Group, we are strongly of the opinion that this isvery much just a base level. Clearly we are thrilled at the success of Kami butwe are now very focussed on the prospect of developing Big Mouth Bayou where weexpect to commence drilling later this month. This property in Louisiana has hadextensive 3D seismic data analysis completed and lies in a highly productivearea for hydrocarbon extraction. Pre drill estimates of gross unrisked reservesof 700 bcfe being 50 times of the reserve estimate of Kami speaks for itself interms of potential value. Dr Bob Williams and his team are also looking toexploit at least 2 further PUD prospects with significant reservoir estimatesduring the course of the year." For further information please contact: At Crosby:Simon Fry (Chief Executive Officer) Tel: +44 207 590 2800 At KBC Peel Hunt (Nominated Adviser and Joint Broker):Matt Goode Tel: +44 207 418 8811 At Dawnay Day (Joint Broker):David Banks Tel +44 207 070 5692 At Fishburn-Hedges (Public Relations):Andy Berry Tel: +44 207 839 4321 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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