SOURCE: PrimeGen Energy Corporation

May 29, 2007 16:37 ET

PrimeGen Energy Announces Corporate Developments

DALLAS, TX--(Marketwire - May 29, 2007) - PrimeGen Energy Corporation (OTCBB: PGNE) ("PrimeGen" or the "Company") today announced significant corporate developments.

Since PrimeGen's inception as an oil and gas startup company, management has been attempting to obtain independent financing in order to proceed with the orderly development of the projects in which the Company was successful in acquiring varying interests. Such projects include the Fayetteville, Arkansas project, the data analysis and development project in Kansas, and the revenue sharing project in the Manyberries area of Southern Alberta.

The Fayetteville and Kansas projects were acquired through the issuance of promissory notes to the vendors of the projects and it was the Company's intention to repay these amounts with revenues from resulting operations. The amounts due to the vendors are $2,500,000 (Fayetteville) and $675,000 (Kansas), plus interest at 6% from the date of the respective acquisitions. Significant additional capital is required to develop these projects.

The Manyberries project requires the Company to advance development funds in order to earn an interest in the resulting gas revenue earned by MB Gas Inc.

The Company was unable to independently fund its Fayetteville-related cash calls, including those related to the land integration process, with the result that the property vendor was obliged to provide the interim funding required in order to maintain the interest unimpaired.

The same was true for the Kansas project, and the vendor of that project agreed to temporarily provide minimal interim funding in order to keep the project operational.

To date the Company has been unable to advance any funds to the Manyberries project.

As at March 31, 2007, the Company had current liabilities of $3,839,613, inclusive of the Fayetteville and Kansas-related promissory notes.

Management has attempted to find partners or lenders willing to assist; however, due in part to the Company's recent trading performance, this task has proven impossible. Accordingly, it has been determined that a reorganization process must be initiated. As part of this process, PrimeGen intends to quitclaim and return the Fayetteville and Kansas assets to the respective vendors in consideration for the forgiveness and indemnification of and from all present and future liabilities related to the acquired assets. This process remains subject to the preparation and execution of required documentation.

In addition, it appears unlikely that PrimeGen will be capable of funding MB Gas and, accordingly, the Manyberries project is not expected to proceed.

At present and without any financing, the Company's ability to continue as a going concern remains in jeopardy. However, management is committed to reviewing all options available, including making all necessary changes and additions to the Board, with the aim of acquiring a viable business opportunity.

Mr. Glen Harder has resigned from the Board to pursue other opportunities. We wish him well and thank him for his work with the Company.

Notice Regarding Forward-Looking Statements

This news release contains "forward-looking statements," as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such forward-looking statements include those relating to obtaining releases and related documentation from property vendors and obtaining a new project and financing sufficient to allow the Company to continue.

Actual results could differ from those projected in any forward-looking statements due to numerous factors. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations, and intentions contained in this press release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-KSB, our quarterly reports on Form 10-QSB and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
PrimeGen Energy Corporation

William S. Marshall, Chairman

Contact Information

  • Investor Information:
    1-888-417-5454