Canadian Oil Recovery & Remediation Enterprises Ltd.
TSX VENTURE : CVR

Canadian Oil Recovery & Remediation Enterprises Ltd.

July 16, 2009 09:00 ET

Canadian Oil Recovery & Remediation Enterprises Ltd. Announces Closing of $1.5 Million of $10 Million Financing Commitment and Conditional Exchange Approval of Remaining $8.5 Million Commitment

TORONTO, ONTARIO--(Marketwire - July 16, 2009) - Canadian Oil Recovery and Remediation Enterprises Ltd. (TSX VENTURE:CVR) ("CORRE" or the "Company"), a provider of leading edge oil recovery and remediation technologies and services, is pleased to announce that it has closed on $1.5 million of its recently announced two-phase financing for aggregate gross proceeds of up to $10 million (the "Financing") (see CORRE's press release dated June 16, 2009 for further details of the Financing) and that the TSX Venture Exchange has granted conditional approval in respect of remaining $8.5 million balance of the Financing.

As noted in CORRE's June 16, 2009 press release, the aggregate $1.5 million financing commitment is from Hassan Dahlawi, an existing director of the Company, based in Jeddah, Saudi Arabia. Phase I of this portion of the Financing has now been completed, with a convertible debenture in the aggregate principal amount of $750,000 (the "Dahlawi Debenture") being issued to Mr. Dahlawi, together with a common share purchase warrant (the "Dahlawi Share Warrant"), pursuant to which he has undertaken to subscribe for and fund $750,000 of common shares of CORRE at a price of $0.20 per share.

The Dahlawi Debenture has a coupon of 10% (payable quarterly in arrears) and a maturity date of one (1) year from the date of issuance, subject to extension for one (1) additional year beyond the initial term. The Dahlawi Debenture is convertible into common shares of the Company at a price of $0.20 per share at any time prior to maturity at the option of the holder. The Debenture will convert into common shares automatically upon review and acceptance by Al-Najah Advanced Technology Co. Ltd. ("NAT") of CORRE's formal five-year business and financial plan. CORRE is currently developing this business and financial plan and will deliver it to NAT within three (3) months of closing of the NAT portion of Phase I of the Financing. Following receipt of this plan, NAT will have two (2) months to review the plan and provide comments to the Company. Provided that NAT accepts the business and financial plan within this timeframe, the Dahlawi Debenture will convert automatically into common shares of the Company. The Dahlawi Debenture will be secured against the Company's ARES I Plant (currently located in Kuwait) and ARES III Plant (currently located at CORRES's testing facility in Montreal, Quebec). The security under the Dahlawi Debenture will be subordinate to the security evidenced by the NAT Convertible Debenture upon issuance thereof.

The Dahlawi Share Warrant shall be exercisable on or before the date that is one (1) year from the date that the entire principal amount of the Dahlawi Debenture is converted into common shares of CORRE (the "Dahlawi Phase II Financing Share Warrant Commitment Date") and shall be funded over four stages as follows:

- $187,500 to be advanced within three (3) months of the Dahlawi Phase II Financing Share Warrant Commitment Date;

- $187,500 to be advanced within six (6) months of the Dahlawi Phase II Financing Share Warrant Commitment Date;

- $187,500 to be advanced within nine (9) months of the Dahlawi Phase II Financing Share Warrant Commitment Date; and

- $187,500 to be advanced within twelve (12) months of the Dahlawi Phase II Financing Share Warrant Commitment Date.

Notwithstanding the obligations on the part of Mr. Dahlawi to provide such advances on or before the foregoing dates, Mr. Dahlawi shall be entitled to provide any or all of the foregoing advances at any time prior to their respective obligated dates of advance.

In accordance with applicable securities laws, the Dahlawi Debenture and the Dahlawi Share Warrant, together with any common shares of the Company issued upon conversion or exercise of either of the foregoing, are subject to four-month hold periods that will expire on November 17, 2009.

The proceeds of the Financing will be used: (i) to fund the purchasing and fabrication of plant and ancillary equipment as required in support of CORRE's anticipated project pipeline; (ii) to fund bid and performance bonds, as well as necessary mobilization and site commissioning costs as required for CORRE's expected projects; (iii) to fund potential joint partnerships to expand the Company's oil service product offerings; and (iv) for general working capital purposes.

About CORRE

CORRE is a Canadian company that utilizes its proprietary Advanced Recovery Equipment Systems ("ARES") program to provide five comprehensive solutions for oil recovery and soil remediation. ARES I, II and IV are commercialized technologies offering economically viable and environmentally safe sludge treatment solutions and remediation of oil contaminated sand, soil and solids. ARES III is currently being commercialized for the extraction of oil from tar sands and ARES V represents a bioremediation technology in research and development. CORRE plans to deploy ARES in the oil producing countries of the Middle East and other regions where there is substantial demand for its oil recovery and remediation services.

Forward Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Except as required by applicable securities requirements, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the release.

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