Alpetro Resources Ltd.

Alpetro Resources Ltd.

September 20, 2005 11:53 ET

Alpetro Resources Ltd.: News Release

CALGARY, ALBERTA--(CCNMatthews - Sept. 20, 2005) - Alpetro Resources Ltd. (TSX VENTURE:ALF) ("Alpetro") today announced that it has entered into a formal purchase and sale agreement with Pengrowth Corporation ("Pengrowth") to acquire all of Pengrowth's interests in certain oil and gas properties and facilities located in West Central and Southern Alberta for cash consideration of $5,700,000 effective as at June 1, 2005. The interests comprise 10,348 net acres of land, net production in excess of 110 BOE/d and a 100% owned gas plant with designated capability of 6.5 mmcf/d. It is anticipated that the acquisition will add approximately 212,000 BOE to Alpetro's current proved and probable reserves and will approximately triple Alpetro's net income.

This acquisition will constitute a significant step in the growth of Alpetro and the properties to be acquired offer substantial incremental upside for optimization, exploitation and drilling opportunities. Alpetro's board of directors unanimously supports the acquisition and has concluded that it is in the best interests of Alpetro's shareholders.

Alpetro is also pleased to announce a non-brokered private placement of 2 million common shares at $0.20 per share for gross proceeds of $400,000, to close concurrently with and be used for the foregoing acquisition. The private placement will be made to four placees, two of whom are directors of Alpetro (Nazrul Islam, who is also the President, and William Richards) and two of whom are close personal friends of Nazrul Islam. As directors and insiders of Alpetro, Nazrul Islam and William Richards can be considered "related parties" for the purposes of Policies 4.1 and 5.9 and Appendix 5B (being OSC Rule 61-501) of the TSX Venture Exchange (the "Exchange"). Neither Alpetro nor, to the knowledge of Alpetro after reasonable inquiry, William Richards or Nazrul Islam has knowledge of any material information concerning Alpetro or its securities that has not been generally disclosed. Nazrul Islam will subscribe for 1,250,000 common shares of the private placement, thereby increasing his common shares in Alpetro from 3,818,000 shares (representing 67.3% of the outstanding voting interest before the private placement) to 5,068,000 shares (representing 66% of the outstanding voting interest after the private placement). William Richards will subscribe for 250,000 common shares of the private placement (representing 0.33% of the outstanding voting interest after the private placement); Mr. Richards does not currently own shares in Alpetro. The other two placees will each subscribe for 250,000 common shares of the private placement.

Each of the foregoing transactions is conditional upon receipt of Exchange approval.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Alpetro Resources Ltd.
    Nazrul Islam
    (403) 234-9006
    Alpetro Resources Ltd.
    #2240, 444 - 5th Ave. S.W.
    Calgary, Alberta T2P 2T8