Anglo Canadian Oil Corp.
TSX VENTURE : ACG

Anglo Canadian Oil Corp.

February 13, 2012 07:00 ET

Anglo Canadian Oil Initiates Process to Enhance Shareholder Value

CALGARY, ALBERTA--(Marketwire - Feb. 13, 2012) - Anglo Canadian Oil Corp. ("Anglo" or the "Company") (TSX VENTURE:ACG) is pleased to announce that its Board of Directors has decided to initiate a process to identify, examine and consider a range of strategic alternatives available to the Company with a view to enhancing shareholder value.

Strategic alternatives may include, but are not limited to, a sale of all or a material portion of the assets of Anglo, either in one transaction or in a series of transactions, the outright sale of the Company, or merger or other transaction involving Anglo and a third party. For the purposes of considering strategic alternatives, Anglo has established a special committee to oversee the process. Anglo has engaged PI Financial Corp. ("PI Financial") as its financial advisor in connection with the process.

The Board of Directors has determined that the Company's shares trade at a significant discount to the value of its underlying assets, especially given its significant Nordegg, Beaverhill Lake and Duvernay prospective land base, strong balance sheet, and producing Bakken heavy oil assets.

Anglo owns rights to 172,160 acres (269 sections) of potential Nordegg oil bearing lands in West Central Alberta, as well as 89,919 acres (140 sections) of potential oil bearing Beaverhill Lake and Duvernay lands in Central Alberta and an additional 17,640 acres (27 sections) of potential Bakken and Mannville oil bearing lands in the Kindersley area of Southwest Saskatchewan. In the vast majority of these lands, the Corporation holds a 100% working interest.

Anglo Canadian Oil Corp. ("Anglo" or the "Corporation") has obtained an independent resource study in respect of its 172,169 acre "Nordegg Member" oil prospect in West Central Alberta. This resource evaluation (the "Report") was prepared by AJM Petroleum Consultants ("AJM"), an independent qualified resource evaluator, with an effective date of June 30, 2010 and complies with the Canadian Oil And Gas Evaluation Handbook (COGEH) standards and National Instrument 51-101 entitled Standards of Disclosure for Oil and Gas Activities as adopted by the Canadian Securities Regulators.

Probabilistic analysis was used in the preparation of this volumetric resource estimate on Anglo's lands in the "Nordegg Member". The Report documents the results of AJM's independent evaluation with the following table summarizing the total un-risked Discovered Petroleum Initially-in-Place ("DPIIP") volumes for the four areas studied, including a best estimate of over 6.47 billion barrels of Petroleum Initially in Place as follows:

Discovered Petroleum Initially-In-Place (Mstb)

Area Low Best High
Rycroft, Alberta 605,310 781,862 1,009,909
Kakut, Alberta 1,287,287 1,691,537 2,222,736
Sturgeon Lake, Alberta 1,845,799 2,465,124 3,292,252
Ante Creek North, Alberta 1,193,885 1,537,890 1,981,016
Total (Arithmetic Sum)* 4,932,281 6,476,413 8,505,913

*Note: These volumes are an arithmetic sum of multiple estimates of Discovered Petroleum Initially-in-Place, which statistical principles indicate to be misleading as to volumes that may actually be initially in place. Readers should give attention to the estimates of the individual classes of DPIIP and appreciate the differing probabilities associated with each. The probability associated with the High estimate would be considered far less than P10, and conversely, the Low estimate would be expected to be much higher than the presented arithmetic sum. Probabilistic aggregation could have been performed, but given the lack of general acceptance in these procedures, COGEH (section 5.5.3) prefers that these values not be presented.

Jim Ehret, President of Anglo said, "Anglo is well positioned to continue to develop its Nordegg oil resource play projects. With approximately $4.5 million in cash, no bank debt, 269 sections of potential Nordegg oil bearing lands, 140 sections of multi-stacked zone oil potential in central Alberta, and 27 sections of Bakken and Mannville acreage with Bakken heavy oil production, Anglo's shares trade at a substantial discount to the underlying value of our assets and we believe it is in the best interests of all shareholders to initiate a strategic alternatives review process at this time."

Parties interested in obtaining further information regarding the process or the Company can contact Arthur Kwan, Director of Energy Investment Banking at PI Financial at akwan@pifinancialcorp.com.

This strategic alternative review process has not been initiated as a result of receiving any offer and there are no assurances that a transaction will be undertaken. It is Anglo's current intention not to disclose developments with respect to the process unless and until the Board of Directors has approved a specific transaction or otherwise determines that disclosure is necessary. The Company cautions that there are no assurances or guarantees that the process will result in a transaction or, if a transaction is undertaken, the terms or timing of such transaction. Given the current preparation of the Company's annual independent reserves and resource report and the expected timing of its completion, the Company has not established a definitive schedule to complete its identification, examination and consideration of strategic alternatives.

About Anglo

Anglo is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Common Shares are listed on the TSX Venture Exchange under the trading symbol "ACG".

Cautionary Statements

Forward-looking information and statements

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the forgoing, this news release contains forward-looking information and statements pertaining to the following; the potential results of the strategic alternative review process and enhancement of shareholder value; disclosure intentions with respect to the strategic alternative review process; the timing of the completion of the Company's annual independent reserve report, the number of prospective drilling locations in its three core areas; the funding of the 2012 capital expenditure program; 2012 production rates; the Company's financial strategy and balance sheet; the timing for completion and equipping of wells; the volume and product mix of Anglo's oil and gas production; the ability to develop the Company's Nordegg oil resource play, benefits from employing modern reservoir techniques; the use of the Company's cash flow from operations; future production guidance and growth, per share growth, the number of wells to be drilled and potential development drilling and number of potential horizontal Nordegg oil development locations.

In addition, forward-looking statements or information are based on a number of material factors, expectations or assumptions of Anglo which have been used to develop such statements and information but which may prove to be incorrect. Although Anglo believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Anglo can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: results from drilling and development activities consistent with past operations; the continued and timely development of infrastructure in areas of new production; continued availability of debt and equity financing and cash flow to fund Anglo 's current and future plans and expenditures; the impact of increasing competition; the general stability of the economic and political environment in which Anglo operates; the timely receipt of any required regulatory approvals; the ability of Anglo to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Anglo has an interest in to operate the field in a safe, efficient and effective manner; the ability of Anglo to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Anglo to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Anglo operates; the ability of Anglo to successfully market its oil and natural gas products; that all necessary regulatory approvals will be obtained as and when required, that there will be no material adverse change in the Company's affairs or laws, rules or regulations relating to the Company, its securities or business, there will be no regulatory proceedings involving the Company or any of its directors or officers, or any cease trade or other order prohibiting or restricting trading in the Company's securities and no major national or international event will have occurred that has or could reasonably be expected to have a material adverse effect on financial markets or the business, operations or affairs of the Company.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statement, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward-looking information or statements including, without limitation: changes in commodity prices; changes in the demand for or supply of Anglo's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Anglo or by third party operators of Anglo 's properties, increased debt levels or debt service requirements; inaccurate estimation of Anglo's oil and gas reserve and resource volumes; limited, unfavorable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time-to-time in Anglo's public disclosure documents, (including, without limitation, those risks identified in this news release and Anglo's documents filed on SEDAR).

The forward-looking information and statements contained in this news release speak only as of the date of this news release, and Anglo does not assume any obligation to publicly update or revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

BOE Equivalent

Barrel of oil equivalents or BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf : 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange has neither approved nor disapproved the information contained herein.

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