SAN DIEGO, July 12, 2006 (PRIMEZONE) -- Surge Global Energy, Inc., (OTCBB:SRGG), former parent company of Signet Energy, Inc. ("Signet"), the operator of the Sawn Lake Oil Sands Development, today announced that Signet completed its second round of equity financing for gross proceeds of C$18.7 million. The private placement was co-lead by RBC Capital Markets ("RBC") and MGI Securities Inc.
The use of proceeds includes the continuation of the drilling program, resource delineation, and production testing at the Sawn Lake Oil Sands Development in Alberta, Canada, as well as land acquisition and for general corporate purposes.
"We are pleased to have the confidence and support of RBC, which has carried out financing and advisory work for Canada's oil industry since 1947 and is the leading Canadian financial institution in the energy industry," said David Perez, CEO and Chairman of Surge Global Energy and Director of Signet.
Signet has now successfully raised over C$32 million in the past 9 months. With this funding, Signet has secured the adequate capital it needs to fulfill its obligation to pay 80 percent of drilling costs for the first 10 wells and earn a 40 percent working interest in the Sawn Lake property. The amended Farmout Agreement with Deep Well Oil & Gas, Inc. ("Deep Well") requires that all 10 wells must be completed by February 25, 2008.
"It is evident that Signet has a major asset and, in a short period of time, has been able to attract world-class investment financial institutions like RBC that understand the Canadian oil sands and specialize in the financing of such operations," said Daniel Schreiber, Director of Surge and CEO of Granite Financial Group, Inc.
As a result of Signet's sale of stock, Surge will no longer control over 50 percent of the voting stock of Signet. Surge's new voting control is now 47.4 percent until February 2007 (fully diluted voting control of 36.2 percent assumes exercise of all outstanding warrants, conversion of all convertible debt and options are issued and exercised). Surge currently owns a 27.4 percent equity interest in Signet (fully diluted equity interest is 21.0 percent). Surge's future financial statements will no longer be consolidated with those of Signet.
Background Information about the Sawn Lake Oil Sands Development:
The Sawn Lake Oil Sands Development has been estimated by two respected third-party petroleum engineering firms to contain a total of 820 million to 1.2 billion barrels of oil resource in place, of which Signet Energy can earn a 40 percent working interest on all contiguous sections covering 44,480 acres in the Sawn Lake area of Alberta, Canada. Signet has commitment to drill a total of 10 wells, each well drilled earns Signet an interest in the field; one well has been drilled and completed to date and demonstrated cold flow reservoir characteristics. To date, Signet has earned a 40 percent working interest in 6 sections. Deep Well is being carried by Signet for the first 10 wells and thereafter, Deep Well is required to pay their 40 percent share, along with each of the two other 10 percent working interest partners that pay their share of completion, production test and operating costs.
About Surge Global Energy, Inc.
Surge Global Energy, Inc., located in San Diego, California, is the majority shareholder of Signet Energy, Inc. The company invests in assets that target Canadian oil sands and conventional oil and gas properties in North and South America. Surge also holds a working interest in the Santa Rosa Dome project in Mendoza province of Argentina and also has rights to earn a working interest in the Keg River Formation in the Kitty area of North Central Alberta, Canada. For more information on the company please visit www.SurgeGlobalEnergy.com.
The Surge Global Energy, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2471
Forward-Looking Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include the statements regarding the Company's expectations, hopes or intentions regarding the future, including, but not limited to, general economic conditions, market and business conditions; potential production and industry capacity and estimates. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Those risks and uncertainties include the possibility Signet will not determine it is feasible to drill all 10 wells at Sawn Lake in Alberta, Canada or that if Signet does drill, it will not discover oil or gas in the quantities the Company currently anticipates. Other risks and uncertainties of the Company's business could cause actual results to differ and are discussed under the heading "Risk Factors" and in other sections of the Company's SB-2/A filed with the SEC on May 24, 2006, the Company's Form 10-K for the 2005 fiscal year and in the Company's other periodic reports filed from time to time with the SEC. All forward-looking statements in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statements.