Point North Energy Ltd.
TSX : PNY

Point North Energy Ltd.

January 26, 2007 19:30 ET

Point North Energy Provides CCAA Process Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 26, 2007) - Point North Energy Ltd. (TSX:PNY) ("Point North" or "the Company") provides an update as to the status of its Companies' Creditors Arrangement Act ("CCAA") process.

As of January 26, 2007, as the result of a lengthy and comprehensive marketing process, the Company has received offers on all of its properties including Ft. Liard, NT. The Company was unable to find a purchaser for the entire asset base, and consequently, offers have been accepted on various parcels of assets. These potential purchases are at different stages in the sales process. At this time, subject to monitor, regulatory and court approval, the Company has offers totalling approximately $4.5 million for its producing and non-producing assets.

The Company has also received a $2.4 million offer, subject to monitor, regulatory and court approval, to take over its office lease.

Creditors are cautioned that the majority of the funds recovered from the Company's potential asset sales are subject to significant contingencies, including Court approval. There can also be no guarantee all of the proposed transactions will close.

The remaining assets of Point North, including the corporate shell and frontier seismic data library, are unlikely to generate the funds required to pay in full the outstanding claims against the Company under the CCAA process. The Company presently anticipates that any plan of restructuring or liquidation will result in no return for holders of common shares of the Company. Accordingly, the Company urges that the appropriate caution be exercised with respect to existing and future investments in these securities as their value and prospects are highly speculative.

As of January 26, 2007, Point North is in receipt of claims totalling $34 million under the CCAA process. The Company has accepted $15.4 million and is currently reviewing an additional $12.6 million in claims. Efforts are being made to resolve these disputed claims in a timely and fair manner.

Forward Looking Statements

Information in this press release contains forward-looking statements including expectations of future production and components of cash flow and earnings. Investors are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Point North Energy. These risks include, but are not limited to; the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs, expenses and working capital/liquidity. The risks outlined above should not be construed as exhaustive. Investors are cautioned not to place undue reliance on any forward-looking information. Point North Energy undertakes no obligation to update or revise any forward-looking statements.

Contact Information

  • Point North Energy Ltd.
    John Emery
    President & C.E.O.
    (403) 269-5803
    (403) 264-1336 (FAX)
    or
    Point North Energy Ltd.
    Doug Grabham
    Vice President Finance & CFO
    (403) 269-5803
    Website: www.pointnorthenergy.com