Onco Petroleum Inc.

Onco Petroleum Inc.

August 05, 2008 15:56 ET

Independent Directors of Onco Petroleum Inc. Announce Suspension of Treasurer and President and CEO as a Result of Unapproved Payments Made to Them, Resignation of Director

LONDON, ONTARIO--(Marketwire - Aug. 5, 2008) - The independent members of the board of directors of Onco Petroleum Inc. (CNQ:ONCO)(FRANKFURT:3HX) ("Onco" or the "Company"), namely Berthe Lambert and Richard-Marc Lacasse, regret to report that, effective immediately, Mr. Robert Vanier, President and CEO and a director of Onco, and Ms. Terri Ramage, Treasurer and a director of Onco, have been suspended from their positions as officers and directors of Onco.

Onco's board of directors was recently provided with management-prepared financial statements for the years ended December 31, 2007 and 2006, as well as the corresponding management-prepared management's discussion and analysis. These reports indicate that a significant portion of Onco's funds (approximately $17.3 million) was paid to Mr. Vanier and Ms. Ramage personally and/or to one or more companies associated with them. These unaudited financial reports indicate that the transactions occurred subsequent to December 31, 2007, and that the payments in question were made in repayment of loans and/or advances to Onco, and in respect of the purchase by Onco of certain real estate and equipment. None of these transactions was approved by Onco's board of directors, and the board of directors was not provided with any advance notice of the transactions.

Following their receipt of these financial reports, the independent members of Onco's board of directors immediately requested information from Mr. Vanier and Ms. Ramage regarding the financial transactions concluded between them and Onco, regarding the nature and extent of those transactions, as well as regarding Onco's current and recent bank balances. In addition, the independent members of Onco's board of directors demanded that the funds be returned to Onco.

As Mr. Vanier and Ms. Ramage have neither provided the information requested, nor have they provided evidence that Onco's funds have been returned to the Company's bank accounts, the independent members of Onco's board have advised Mr. Vanier and Ms. Ramage of the immediate suspension of their service as officers and directors of the Onco. The independent members of Onco's board of directors have also advised Onco's employees, agents and other officers that until further notice, they must immediately cease taking any directions from Mr. Vanier and Ms. Ramage with respect to Onco matters.

In an effort to understand Onco's current financial position, to verify the completeness of the financial reports provided to them, and to determine the nature and extent of transactions concluded between Onco and Mr. Vanier and Ms. Ramage (and/or companies they control), the independent members of Onco's board will contact financial institutions and other parties. They may also take other actions to secure Onco's assets and protect the interests of the Company and all of its shareholders, including taking appropriate actions to maintain Onco's interests in its oil and gas leases.

The independent members of Onco's board of directors anticipate disclosing further information regarding the events reported in this press release as well as regarding Onco's current financial position as and when that information becomes available to them. At this time, the independent members of Onco's board of directors anticipate that Onco now holds less than $2.5 million of cash and cash equivalents. However, no information has yet been provided to Onco's board of directors to confirm that Onco continues to hold these or any other sums.

The independent members of Onco's board of directors have advised the Ontario Securities Commission and the police that approximately $17.3 million of Onco's funds appear to have been transferred to officers of the Company and to companies they control without the consent of Onco's board, and that the independent directors have serious concerns about the propriety of those payments. With the objective of protecting all of Onco's shareholders, the independent directors intend to fully cooperate with any investigation or other measure instituted by the Ontario Securities Commission, the police or other proper authorities.

Finally, the independent members of Onco's board of directors are also announcing that Mr. Michel Perron resigned as a director of Onco on June 6, 2008. To the knowledge of Onco's independent directors, Mr. Perron's resignation was not related to the payments that are the subject of this press release. Therefore, Onco's board of directors is currently comprised of Terri Ramage, Robert Vanier, Berthe Lambert and Richard-Marc Lacasse. As Mr. Perron's resignation has not been publicly disclosed by management of Onco, the independent directors are providing this disclosure on Onco's behalf.

Forward Looking Statements: This release may contain certain forward looking statements relating to the business, operations, anticipated financial performance, business prospects and strategies of Onco Petroleum Inc. (the "Company"), including but not limited to expectations relating to production levels; the quantity of oil and/or gas reserves; projections of market prices; capital expenditure programs; projections of costs; expectations regarding the ability to continually add to reserves through exploration and development; and treatment under governmental regulatory regimes. These statements are based on current expectations that involve numerous assumptions regarding factors and risks that could cause actual results to differ materially from those projected in forward looking statements. These risks are further described in the Company's prospectus dated October 12, 2007, which is available at www.sedar.com. The use of any of the words "anticipate", "believe", "continue", "could", "estimate", "expect", "may", "potential", "project", "should", "will", and similar expressions are intended to identify forward-looking statements. There is no representation by the Company that actual results achieved will be the same in whole or in part as those set out in the forward looking information. Furthermore, the forward looking statements contained in this release are made as of the date hereof, and the Company undertakes no obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events, changes in the Company's opinion or otherwise.

The CNQ does not accept responsibility for the adequacy or accuracy of this news release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information

  • Onco Petroleum Inc.
    Catherine Sommers
    (519) 646-2959 or Toll Free: 1-866-228-9695
    (519) 433-0509 (FAX)
    Website: www.oncopetroleum.ca