West Isle Energy Inc.

April 18, 2011 09:51 ET

Amendment of Press Release Dated April 12, 2011, in Which West Isle Inc. Announced an Agreement and Financing re: Colombia

CALGARY, ALBERTA--(Marketwire - April 18, 2011) -


West Isle Energy Inc. ("West Isle") (CNSX:WEI) wishes to amend and clarify certain statements made in its press release dated and disseminated on April 12, 2011. That press release was issued without the prior knowledge or approval of Amerisur Exploracion Colombia Limitada ("Amerisur"), which constitutes a material breach of the Fenix Commercial Agreement between Amerisur and Reto Petroleum Limited. The text of the revised press release, which has been reviewed and approved by Amerisur, is as follows:

"West Isle announces that it has entered into an arm's-length agreement (the "Reto Transaction") for the purchase of all the shares of a Cayman Islands private corporation called Reto Petroleum Ltd. ("Reto"). Reto has a Colombian branch called Reto Petroleum Limited Colombia Branch ("Reto Colombia") that has entered into a Commercial Agreement ("Amerisur/Reto Agreement") relating to the Fenix Block in Colombia with Amerisur. Amerisur is a subsidiary of Amerisur Resources Plc, a London based oil & gas exploration and production company that is listed on the AIM board of the London Stock Exchange.

The Fenix Block consists of 24,117 hectares in the Middle Magdalena Basin of central Colombia contracted to Amerisur by the Agencia Nacional de Hidrocarburos ("ANH") under an exploration and production contract (the "Contract"). Some 2D and 3D seismic is available over the block and discovery wells have been drilled by Amerisur and are in production. The Amerisur/Reto Agreement is designed to delineate and expand upon these discoveries. Under the terms of the Amerisur/Reto Agreement, Amerisur is and will remain the operator of the Contract. Amerisur is an experienced and respected exploration and production operator in Colombia, with the personnel and resources necessary to operate in challenging environments.

West Isle will issue 12,500,000 common shares ("Common Shares") to acquire all of the shares of Reto. The issuance of these Common Shares to acquire Reto will constitute a reverse take-over of West Isle. The reverse take-over transaction is conditional on the completion of a concurrent financing, in the initial amount of $7 million, to fund part of the work program under the Amerisur/Reto Agreement to earn interests in the Contract.

The Amerisur/Reto Agreement has two earning phases. Under Phase 1 Reto can earn a 20% working interest in the Contract by drilling 5 stratigraphic wells and 5 appraisal/development wells in the area of Amerisur's discovery wells. The first appraisal/development well must be completed within 12 months, and all of these wells must be completed within 18 months. Reto will not earn under Phase 1 until it has satisfactorily completed the Phase 1 work program. If Reto satisfactorily completes the Phase 1 work program then, under Phase 2, Reto can earn an additional 10% working interest in the Contract by the acquisition and processing of 75kms of 2D seismic prior to June 21, 2012. Reto estimates that its cost to earn this interest under the Phase 2 work program will be USD$1.95MM.

To implement the Phase 1 work program Reto intends to purchase and operate a drilling rig suitable to the requirements of the work program. The cost to purchase and to outfit the drilling rig to conduct operations on the Fenix Block will be approximately USD$1.5MM. By owning a drilling rig Reto can significantly reduce the cost of the Phase 1 work program, it can improve the economics of further exploration and appraisal activities on the Fenix Block and it may create opportunities for Reto to participate in further exploration activities in Colombia.

West Isle has received an undertaking from the principal personnel of Reto to manage and direct West Isle's interests in the agreement for a minimum period of Phase 1.

As security for Reto´s performance during Phase 1 it is required to deposit in escrow an amount sufficient to complete satisfactorily its obligations. These funds shall be under the control of Amerisur and be released from escrow to pay the costs of the Phase 1 work program as they are incurred. Reto has made a warranty to Amerisur that it has, or has access to, the funds necessary to complete satisfactorily the Phase 1 work program.

To finance part of the cost of the Amerisur/Reto Agreement, and to provide necessary working capital, West Isle has entered into a best efforts Engagement Agreement with D & D Securities Inc. ("Agent") of Toronto to raise $7 million under a private placement by the issuance of units ("Units") of West Isle at $0.20 per Unit where each Unit is comprised of one Common Share and one half of a warrant ("Warrant") and a full Warrant entitles the holder to purchase one additional Common Share at the price of $0.30 each. The exercise period for the Warrants shall be 24 months from date of issuance, subject to a shortened expiry period in the event the Common Shares of West Isle trade at or above $0.40 each for more than 20 consecutive days. If all of the Warrants are exercised West Isle will receive an additional $5.25MM. The Agent will be paid a commission of 8% cash and the Agent will receive broker's warrants ("Broker's Warrants") to purchase that number of West Isle Common Shares equal to 8% of the number of Units sold under the offering, at a purchase price of $0.30 per Common Share, and the exercise period for the Broker's Warrants shall be 24 months from the date of issuance, subject to a shortened expiry period in the event the Common Shares of West Isle trade at or above $0.40 each for more than 20 consecutive days. The closing of the financing is conditional on a formal Agency Agreement with standard market-out clause and appropriate regulatory approvals."

For more information about West Isle visit the website www.westisleenergy.com, the Listings Disclosure Hall at www.cnsx.ca or on SEDAR at www.sedar.com.

This release includes certain statements that may be deemed "forward looking statements". All statements in this release, other than statements of historical facts, which address future activities including the closing of the financing, exploration drilling and activity, and events or developments that the Corporation intends, plans, anticipates, believes, estimates or expects are forward looking statements. Actual results may differ materially. Although the Corporation believes such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward looking statements. Factors that could cause results to differ materially from those in the forward looking statements include, but are not limited to: inability to close the Reto Transaction or the Financing or closing with material amendments, market conditions and difficulties of raising funds in the economic environment, availability and costing of exploration contractors; exploration success; continued availability of capital government regulations, laws and charges; environmental developments; exploitation economics; and generally the economic, market, financial and business conditions in the present volatile and uncertain economic period. Investors are cautioned that any statements are not guarantees of future performance and actual results or developments may differ materially from those stated in the forward looking statements. The Corporation does not intend, and does not assume any obligation, to update these forward-looking statements to reflect events or circumstances after the date hereof. More detailed information about potential factors that could affect financial results is included in the documents filed from time to time with the Canadian securities regulatory authorities by West isle. This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

The CNSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information