East West Petroleum Corp.
TSX VENTURE : EW.H

East West Petroleum Corp.

August 18, 2010 15:03 ET

East West Petroleum Corp.: Company to Acquire Interest in Producing Oil & Gas Property Property, a "Change of Business" Under TSX.V Rules and Announces Concurrent Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 18, 2010) - Mr. David Sidoo reports that East West Petroleum Corp. ("East West" or the "Company") (TSX VENTURE:EW.H) has entered into a letter agreement dated August 12, 2010 with Sphere Energy Corp. ("Sphere") to acquire Sphere's entire interest in the producing Carbon Property in Alberta (the "Carbon Property"), constituting a "change of business" as contemplated by the policies of the TSX Venture Exchange. This news release has been prepared to fulfill certain disclosure requirements contained in those policies. The acquisition is subject to Exchange and shareholder approval.

The Company has been advised that Sphere is a management company and holds its interest in the Carbon Property in trust for Ucci Energy Corp. as to 93%, and two other companies for the balance.

Purchase Price and Financing

To acquire the Carbon Property, the Company must pay Sphere Cdn$1,200,000. In conjunction with the acquisition, the Company will complete a non-brokered private placement of 10,000,000 units at $0.25 per unit to raise gross proceeds of $2,500,000, each unit consisting of one share and one warrant to buy one share for $0.34 exercisable for a period of three years from closing. Finder's fees will be payable in accordance with the rules of the TSX Venture Exchange, and the placement is subject to Exchange approval. The units are being placed with strategic investors who will assist the Company in its future growth. Management had the ability to place additional units but did not wish the Company to incur any further dilution.

The Carbon Property

The Carbon property is located approximately 50 miles northeast of Calgary, Alberta. Sphere's working interests in this property range from 4.8 to 20% in four producing oil wells and twelve gas wells (eight flowing coal bed methane ("CBM") gas). The wells are producing from the Horseshoe Canyon, Basal Belly River, Belly River, Viking and Glauconitic formations.

Reserves and Production

The estimated net total remaining reserves (proved and probable) of Sphere is 66 MBOE, 83% of it being natural gas. Sphere's net 2010 production is estimated to be 22 BOED and estimated reserve life (RLI) for proven developed producing reserves is 7 years, while RLI for P+P reserves is 9.8 years.

Investors should note that BOEs may be misleading, particularly if used in isolation. For example, a BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The Company

East West was previously in the media business. In 2002 it ceased all active operations and in 2005 the shares of the Company began trading on the NEX Division of the Exchange. Upon acquiring the Carbon Property, East West will be listed on Tier 2 of the Exchange as an Oil & Gas Issuer.

ABOUT EAST WEST PETROLEUM CORP.

East West Petroleum Corp. trades on the TSX Venture Exchange under the symbol EW.H. East West is an emerging exploration and production company focused on conventional and unconventional petroleum resources.

Completion of the transaction is subject to a number of conditions, including the execution of a formal Purchase Agreement, completion of the private placement, Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the COB may not be accurate or complete and should not be relied upon. Trading in the securities of East West Petroleum Corp. should be considered highly speculative.

Contact Information

  • East West Petroleum Corp.
    Greg Renwick
    President & CEO
    +1-972-955-7251
    +1-604-683-1585 (FAX)
    or
    East West Petroleum Corp.
    Nick DeMare
    Director
    +1-604-685-9316
    +1-604-683-1585 (FAX)
    www.eastwestpetroleum.ca