Serrano Energy Ltd.

November 19, 2008 12:54 ET

Serrano Energy Ltd. Announces Private Placement Financing and Letter of Intent to Reduce Its Working Interest in Its Blackrod / Portage Oil Sands Property

CALGARY, ALBERTA--(Marketwire - Nov. 19, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Serrano Energy Ltd. ("Serrano" or the "Corporation") is pleased to announce that it has completed a private placement (the "Private Placement") of 1,400,000 Common Shares issued on a flow-through basis ("Flow-Through Shares") at a price of $5.00 per Flow-Through Share for gross proceeds of $7,000,000.

The Corporation intends to use the proceeds from the Private Placement to fund the exploration expenditures qualifying as Canadian Exploration Expense under the Income Tax Act (Canada) on Serrano's properties located in Alberta and Saskatchewan.

Serrano also announces that it has signed a letter of intent with Pearl Exploration and Production Ltd. ("Pearl") pursuant to which:

(a) Serrano will transfer to Pearl E&P Canada Ltd., a wholly-owned subsidiary of Pearl, ("Pearl E&P") 3/7ths of its interest (or a net 15% working interest) in its Blackrod oil sands leases located south of Fort McMurray, Alberta;

(b) The resulting working interests in the Blackrod project will be 20% for Serrano and 80% for Pearl (through its wholly-owned subsidiaries) and the parties will enter a new joint operating agreement;

(c) Serrano will fund the next $6.25 million of gross expenditures on the Blackrod project, which expenditures will qualify as Canadian Exploration Expense under the Income Tax Act (Canada); and

(d) Pearl will transfer to Serrano all of its 4,037,344 common shares in the capital of Serrano for cancellation and the Pearl nominee will resign from the board of directors of Serrano.

The transaction with Pearl is subject to completion of definitive agreements and applicable regulatory approvals.

Serrano Energy Ltd. is an Alberta-based company formed to participate in heavy oil and natural gas exploration, development and acquisitions in Alberta and Saskatchewan. The Corporation's shares are not currently listed for trading on any stock exchange. Following the Private Placement and prior to the completion of the transactions with Pearl under the letter of intent, the Corporation has 23,494,733 Common Shares outstanding.

Pearl Exploration and Production Ltd. is a public company focused on converting its captured resources into reserves and becoming a substantial North American heavy oil project development company. Additional information, including an updated corporate presentation, is available on the Company's website at www.pearleandp.com.

FORWARD-LOOKING STATEMENTS Certain information set forth in this document, including management's assessment of Serrano's future plans and operations, contain forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Serrano's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Serrano will derive therefrom. Serrano disclaims any intention or obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Serrano Energy Ltd.
    J.W. Grant Robertson
    Vice-President Business Development
    (403) 231-1230
    Email: nevcrow2@telus.net
    or
    Pearl Exploration and Production Ltd.
    Keith Hill
    President
    (604) 689-7842
    Email: khill@namdo.com