TransAmerican Energy Inc.
TSX VENTURE : TAE
FRANKFURT : YQJ

TransAmerican Energy Inc.

August 31, 2009 17:58 ET

TransAmerican Energy Inc.: Notice of Default Pursuant to National Policy 12-203

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2009) - TransAmerican Energy Inc. (TSX VENTURE:TAE)(FRANKFURT:YQJ) (the "Company", "TAE", or "TransAmerican") is filing this Notice of Default pursuant to National Policy 12-203 Cease Trade Orders for Continuous Disclosure Defaults ("12-203") in respect of the Company's inability to file its annual financial statements for the year ended April 30, 2009 (the "Financials") by the deadline of August 28, 2009 as required by National Instrument 51-102 Continuous Disclosure Obligations. In connection with the Company's inability to file the Financials on time, the Company has applied to applicable Canadian securities regulators requesting that a management cease trade order (which restricts trading in the Company's securities by the Company's insiders) be issued as opposed to an issuer cease trade order (which restricts all trading in the Company's securities).

The Company is unable to file the Financials on time due to the cumulative effect of the following factors:

A) The Company's auditors have advised the Company that they do not expect to be able to complete the audit by the filing date. The Company has been in extensive negotiations with a secured creditor about a material debt (approximately three million dollars). The materiality of the debt and the potential effect to the Company's balance sheet should it not be resolved has precluded the Company from completing the financial statements.

B) The complexity of the audit, due in part to the secured creditor issue, significant changes in working interest arrangements and the complexity of related income tax returns, has resulted in a necessity to undertake increased audit procedures.

The Company anticipates that the duration of its default in filing its Financials will be less than 21 days.

The Company intends to remedy the default by taking the following steps:

1. The company has provided the auditors with the completed accounting records and draft financial statements and is diligently working with the auditors to complete the audit.

2. The Company has reached a tentative agreement with the secured creditor which is currently being drafted by the respective lawyers, and will be formally announced once the agreement has been executed.

Pursuant to 12-203, applicable Canadian securities commissions or regulators may impose an issuer cease trade order against the Company if the Financials are not filed by October 28, 2009, being the date that is two months following the date of the filing deadline for the Financials. In addition, an issuer cease trade order may be imposed sooner if the Company fails to file Default Status Reports on time in accordance with 12-203.

The Company intends to satisfy the provisions of 12-203 by filing a bi-weekly Default Status Report containing the information prescribed by 12-203, as long as the Company remains in default of the financial statement filing requirement.

The Company is not currently subject to any insolvency proceedings. If the Company provides any information to any of its creditors during the period in which it is in default of filing the Financials, the Company confirms that it will also file material change reports on SEDAR containing such information.

Note that any financial information contained in this announcement has been prepared by management of the Company and is unaudited.

TRANSAMERICAN ENERGY INC.

Richard Barnett, Chief Financial Officer

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • TransAmerican Energy Inc.
    Richard Barnett
    Chief Financial Officer
    (604) 718-2800
    (604) 718-2808 (FAX)