Border Petroleum Inc.
NEX BOARD : BOP.H

September 17, 2008 12:08 ET

Border Petroleum Inc. Announces Acquisition

CALGARY, ALBERTA--(Marketwire - Sept. 17, 2008) - Border Petroleum Inc. (formerly, Moneta Resources Inc.) ("Border" or the "Corporation") (NEX:BOP.H) today announced a proposed acquisition of certain petroleum and natural gas properties.

Border has entered into an arm's length offer to purchase with Royal Quest Resources Ltd. ("Royal Quest"), a private company, accepted on August 11, 2008 (the "Letter Agreement"). Pursuant to the Letter Agreement, Border has agreed to acquire (the "Acquisition") certain producing petroleum and natural gas assets located in Cardiff, Cherhill, Lloydminster and Norris, Alberta (the "Royal Quest Properties"), for a cash purchase price of $1,300,000, subject to adjustment.

The Acquisition is subject to the policies of the NEX board of TSX Venture Exchange Inc. ("TSX Venture").

About the Royal Quest Properties

The following is a description of the assets being acquired by Border Petroleum, from Royal Quest.

The Norris property of Royal Quest is located in Township 53, Range 18 West of the 4th Meridian, Northwest of Edmonton, Alberta with various operated working interests. The property consists of two operated producing oil wells, five infill oil drilling locations, and 1,040 net acres of land.

The Cherhill property of Royal Quest is located in Township 56, Range 4 West of the 4th Meridian, North of Edmonton, Alberta and consists of a 37.5% operated working interest. The property consists of one producing gas well and 640 net acres of land.

The Cardiff property of Royal Quest is located in Township 55, Range 1 West of the 4th Meridian, East of Edmonton, Alberta and consists of a 100% working interest. The property consists of one producing oil well and 40 acres of land.

The Lloyd property of Royal Quest is located in Township 49, Range 1 West of the 4th Meridian, East of Edmonton, Alberta and consists of a 90% operated working interest. The property consists of two operated producing oil wells, two infill oil drilling locations, and 120 net acres of land.

DeGolyer Report Regarding the Royal Quest Properties

Border engaged DeGolyer and MacNaughton Canada Limited ("DeGolyer"), an international independent engineering firm, to prepare a National Instrument 51-101 compliant report as at August 1, 2008 (the "DeGolyer Report"). The reserve estimations set forth in the DeGolyer Report and summarized below were prepared in accordance with the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101. The estimated Forecast Price Case gross and net proved and probable, as at August 1, 2008, of the Royal Quest Properties are summarized as follows, expressed in thousands of barrels ("Mbbl") for oil and NGL and millions of cubic feet ("MMcf") for sales gas:



COMPANY SHARE - FORECAST PRICE CASE
-------------------------------------------------------------
Remaining Reserves as of August 1, 2008
-------------------------------------------------------------
Light Crude Oil Heavy Crude Oil Natural Gas NGL
--------------- --------------- ----------- -----------
Reserve Gross Net Gross Net Gross Net Gross Net
Category ----- ---- ----- ---- ----- ---- ----- ----
-------- Mbbl Mbbl Mbbl Mbbl MMcf MMcf Mbbl Mbbl
Proved
Developed
Producing 5 4 1 1 53 49 1 -
Non-Producing 2 2 12 11 - - - -
Proved
Undeveloped 35 28 83 73 - - - -
----- ---- ----- ---- ----- ---- ----- ----
Total Proved 42 34 96 85 53 49 1 -
Probable 11 9 26 22 22 20 - -
----- ---- ----- ---- ----- ---- ----- ----
Total Proved
+ Probable 53 43 122 107 75 69 1 -


Based on the Forecast Price Case, estimated future net revenue and net present value of future net revenue before and after income tax attributable to Royal Quest's net interests in the proved developed producing, total proved developed, total proved and proved-plus-probable reserves are summarized as follows, expressed in thousands of Canadian dollars (M$):



TOTAL COMPANY COMPANY SHARE - FORECAST PRICE CASE(1)
---------------------------------------------------------
Future Net Revenue Before Income Tax as of August 1, 2008
---------------------------------------------------------
Discounted
--------------------------------
Undiscounted at 5% at 10% at 15% at 20%
Reserve Category ------------ ----- ------ ------ ------
---------------- M$ M$ M$ M$ M$
Proved Developed
Producing 578 549 523 499 477
Non-Producing 728 690 654 621 591
Proved Undeveloped 5,172 4,606 4,124 3,709 3,350
----- ----- ----- ----- -----
Total Proved 6,478 5,845 5,301 4,829 4,418
Probable 1,830 1,485 1,220 1,015 853
----- ----- ----- ----- -----
Total Proved + Probable 8,308 7,330 6,521 5,844 5,271


TOTAL COMPANY COMPANY SHARE - FORECAST PRICE CASE(1)
--------------------------------------------------------
Future Net Revenue After Income Tax as of August 1, 2008
--------------------------------------------------------
Discounted
--------------------------------
Undiscounted at 5% at 10% at 15% at 20%
Reserve Category ------------ ----- ------ ------ ------
---------------- M$ M$ M$ M$ M$
Proved Developed
Producing 412 391 372 355 339
Non-Producing 517 490 464 441 419
Proved Undeveloped 3,731 3,305 2,943 2,632 2,365
----- ----- ----- ----- -----
Total Proved 4,660 4,186 3,779 3,428 3,123
Probable 1,359 1,100 902 748 627
----- ----- ----- ----- -----
Total Proved + Probable 6,019 5,286 4,681 4,176 3,750

Note: (1) Forecast prices are based on the DeGolyer price forecast
effective August 1, 2008.


Please be advised that net present values of future net revenue do not represent fair market value.

About the Acquisition

The completion of the Acquisition is subject to the approval of TSX Venture and all other necessary regulatory approval. The completion of the Acquisition is also subject to additional conditions precedent, including satisfactory completion of a due diligence review in respect of the Royal Quest Properties by Border, board of directors approval of the Corporation and Royal Quest, the entering into of a formal conveyance agreement, as well as certain other usual conditions.

The Acquisition will be an arm's length transaction as the directors, officers and insiders of Border are not directors, officers or 10% shareholders of Royal Quest.

In connection with the Acquisition, Border has also agreed to pay a finder's fee to Elefterios Aligizakis of $97,500, which will be paid by the issuance of 487,500 common shares of Border with a deemed value of $0.20 per share at the closing of the Acquisition, subject to regulatory approval.

Trading of the Common Shares will not resume until TSX Venture has reviewed the DeGolyer Report regarding the Royal Quest Properties and all other documents required by TSX Venture have been filed. Border will issue a further news release when TSX Venture has received the necessary documentation and trading of the Common Shares is to resume.

As indicated above, completion of the Acquisition is subject to a number of conditions, including but not limited to TSX Venture acceptance and approval. The Acquisition cannot close until the required approvals are obtained. There can be no assurance that the Acquisition will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Information Circular of the Corporation to be prepared in connection with the Acquisition, any information released or received with respect to the Acquisition may not be accurate or complete and should not be relied upon. Trading in the securities of the Corporation should be considered highly speculative.

Reader advisory:

The term "BOE" may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Investors are cautioned that the preceding statements of the companies may include certain estimates, assumptions and other forward-looking information. The actual future performance, developments and/or results of the companies may differ materially from any or all of the forward-looking statements, which include current expectations, estimates and projections, in all or part attributable to general economic conditions and other risks, uncertainties and circumstances partly or totally outside the control of the companies, including natural gas/oil prices, reserve estimates, drilling risks, future production of gas and oil, rates of inflation, changes in future costs and expenses related to the activities involving the exploration, development and production of gas and oil hedging, financing availability and other risks related to financial activities.

The securities of Border being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Acquisition and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Border Petroleum Inc.
    Tyler D. Cran
    Director
    (403) 538-8441