Blue Parrot Energy Inc.
TSX VENTURE : BPA

Blue Parrot Energy Inc.

June 12, 2008 16:00 ET

Blue Parrot Agrees to Sell Assets to Canadian Phoenix

CALGARY, ALBERTA--(Marketwire - June 12, 2008) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Blue Parrot Energy Inc. (TSX VENTURE:BPA) ("Blue Parrot" or the "Company") is pleased to announce that it has entered into an arm's length purchase and sale agreement with Canadian Phoenix Resources Corp. ("Canadian Phoenix") in respect of the sale of a majority of the oil and gas assets of Blue Parrot to Canadian Phoenix for consideration of $14.25 million (the "Asset Sale"). The Asset Sale is subject to regulatory approval and approval by the shareholders of both companies. Blue Parrot is preparing an information circular to be mailed to its shareholders for a special meeting (the "Meeting") of shareholders anticipated to be held on July 22, 2008. Subject to shareholder approval, it is expected that the Asset Sale transaction will be completed by the end of July 2008. For the Asset Sale to proceed, among other things, it must be approved by at least 66 2/3% of the votes cast by Blue Parrot shareholders present, in person or by proxy, at the Meeting. The Asset Sale is not a related party transaction and accordingly, all shareholders will be entitled to vote thereon.

The Asset Sale will result in the issuance to Blue Parrot of 95 million units ("Units") of Canadian Phoenix at a deemed price of $0.15 per Unit. Each Unit will consist of one common share ("Common Share") of Canadian Phoenix and one-half Common Share purchase warrant ("Warrant"). Each whole Warrant will entitle the holder thereof to purchase one Common Share during the period expiring on the second anniversary of the completion of the Asset Sale upon payment of the exercise price of $0.20 per Common Share. If the closing price of the Common Shares on the TSX Venture Exchange ("TSXV") is at least $0.30 for a minimum of 30 trading days, Canadian Phoenix may reduce the exercise period to that date which is 30 days following the date on which the Warrant holders receive notice of the shortened exercise period. Blue Parrot expects to transfer the Units to its principal creditors, in full satisfaction of its outstanding debt of approximately $17,000,000 (being the initially agreed repayment amount on the principal of $11,250,000.00 plus accrued interest), to holders of debentures of Blue Parrot (the "Debentureholders"). It is expected that each Debentureholder will receive approximately 8.44 Units, in exchange for each $1.00 invested in the debentures. No Debentureholder is a director, officer or insider of Blue Parrot.

The Board of Directors of Blue Parrot has carefully reviewed the Asset Sale and various relevant matters, and has concluded that the Asset Sale is in the best interests of Blue Parrot shareholders and recommends that the Blue Parrot shareholders vote in favour of the Asset Sale at the Meeting. All of the directors and officers of Blue Parrot have indicated their intention to vote their Blue Parrot common shares in favour of the Asset Sale.

The properties to be sold pursuant to the Asset Sale are as follows:

Antelope, Alberta

A 50% working interest in 8,320 acres (4,160 acres net) located in the Antelope area of southeast Alberta approximately 275 kilometres east of Calgary. There are 10 producing natural gas wells on these lands.

Campbell-Namao, Alberta

Working interests ranging from 3.25% to 30% in 3,040 acres (692 acres net) located in the Campbell-Namao area of central Alberta approximately 20 kilometres north of Edmonton. There is one producing oil well on these lands. The well is operated by Canadian Phoenix and is currently shut in waiting on the installation of artificial lift equipment.

Capron, Alberta

A before payout 100% (after payout 70%) working interest in 640 acres (448 acres net after payout) located in the Capron area of southeast Alberta approximately 295 kilometres east of Calgary. There is one producing natural gas well on these lands.

Chigwell, Alberta

A 22.5% before payout and 12.5% after payout working interest in 640 acres (144 acres net) located in the Chigwell area of central Alberta approximately 100 kilometres south of Edmonton. There is one suspended natural gas well on these lands.

Taber, Alberta

A before payout 100% (after payout 50%) working interest in 320 acres (160 acres net after payout) and a 100% working interest in 80 acres located in the Taber area of southern Alberta approximately 50 kilometres east of Lethbridge. There is one suspended natural gas well on these lands.

Wallace, Alberta

Minor working interest in 3,200 acres (114 acres net after payout) located in the Wallace area of north central Alberta approximately 180 kilometres east of Grande Prairie. There are two suspended wells, one natural gas well and one oil well on these lands.

Randell, Alberta

A 25% working interest in 4,320 acres (1,080 acres net) located in the Randell area of north central Alberta approximately 210 kilometres east of Grande Prairie. There are two producing oil wells on these lands.

Bonnie Glen, Alberta

An overriding royalty of 11% (subject to adjustment) on Blue Parrot's share of production from its Bonnie Glen, Alberta property. Blue Parrot holds a 98.9627% working interest in 2,400 acres (2,375 acres net) located in the Bonnie Glen area in central Alberta approximately 60 kilometres south of Edmonton. There are 17 producing oil wells on these lands.

Following the Asset Sale and repayment of its debt to the Debentureholders, Blue Parrot will have no material outstanding debt and will continue to operate as a going concern. Blue Parrot will retain its Bonnie Glen property (subject to the royalty described above), which is currently producing approximately 80 to 85 BOE/day, a 834 square kilometre stress fracture detection exploration survey and approximately $8,000,000 in tax loss pools. Following completion of the Asset sale, it is expected that Blue Parrot will continue to meet applicable listing requirements and the Blue Parrot common shares will continue to trade on the TSXV. The trading halt on Blue Parrot's common shares will remain in place until the TSXV has received all satisfactory documentation in connection with the Asset Sale.

In connection with the Asset Sale and the restructuring of Blue Parrot's debt over the preceding several months, Blue Parrot has agreed to pay a consulting fee to Avonlea Holdings Ltd., subject to approval by the TSXV. A further news release will be issued once the particulars of the terms of this payment have been determined.

The Board of Directors of Blue Parrot will continue searching for strategic alternatives to maximize shareholder value through exploration and development opportunities as well as through a possible business combination. There can be no assurance that the Asset Sale transaction will be completed as proposed or at all, as it is subject to a number of conditions including approval of the TSXV and shareholders of each of Blue Parrot and Canadian Phoenix. If Blue Parrot shareholders fail to approve the Asset Sale, the Debentureholders may chose to realize on their security which will limit the ability of Blue Parrot to operate as a going concern.

Forward-Looking Statements Advisory: Certain information regarding Blue Parrot in this new release including management's assessment of future plans and operations, timing of drilling and tie-in of wells, productive capacity of the new wells and productive capacity from different wells, expected production rates, drilling success rates, dates of commencement of production, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Blue Parrot's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward looking statements contained in this news release are made as at the date of this news release and Blue Parrot does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.

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

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