BPI Industries Inc.
TSX VENTURE : BPR

BPI Industries Inc.

July 18, 2005 10:12 ET

BPI Appoints KeyBanc Capital Markets Group and Sanders Morris Harris and Comments on Production

SOLON, OHIO--(CCNMatthews - July 18, 2005) - BPI Industries Inc. (TSX VENTURE:BPR) is pleased to announce the appointment of KeyBanc Capital Markets Group and Sanders Morris Harris to act as financial advisors and placement agents in securing financing for the next stage of BPI's development.

James Azlein, President and CEO, commented that "BPI has embarked on an aggressive program of drilling that contemplates drilling 9 horizontal pilot wells within the next 6 months and up to 15 vertical wells per month on our Delta Project. In addition, this summer we will be conducting extensive drilling and testing on our other projects within the Illinois Basin." Mr. Azlein further commented that "based on the progress BPI had made in developing its Delta Project, the increase in the market cap of BPI, and the current market interest in CBM projects management determined that raising the funds needed to finance this drilling and testing activity through conventional financing and/or the sale of securities would be less dilutive to existing shareholders than the joint venture proposals we previously considered."

Mr. Azlein noted that "as dewatering continues on the initial single seam wells we drilled, we are seeing production increase and anticipate increased revenues as a result. Because of dewatering times and the desorption process, an average well takes approximately 10 - 12 months to reach 95% of peak production, so the recent dual seam wells we drilled and the planned wells discussed above will take some time to contribute significantly to our revenues. Gas prices are high compared to historical levels and management expects that trend to continue." Gross gas production has grown from 2,530,000 scf in January 2005 (our first month of production) to 8,513,000 scf in June 2005.

About BPI Industries Inc.

BPI Industries is a Canadian, publicly listed, oil and gas exploration company that currently controls 418,435 acres of coal bed methane rights in the Illinois Basin. In January 2005 BPI initiated sales of gas production from its Delta Project in Illinois where the company is actively drilling new production wells.

In March 2005 BPI entered into a Technical Service Agreement with BHP Billiton (NYSE - BHP; BBL Australia - BHP.AX; London - BLT.L) to provide technical services related to BHP Billiton's technologies and know how in the areas of drilling and completion of in-seam coalbed methane wells as well as methane recovery from coal mining operations. These technologies and know how will be utilized on BPI's projects in the Illinois Basin.

BPI has invested in excess of U.S. $ 20 million in the Illinois Basin to date on acquisition, testing, evaluating and defining of oil and gas opportunities. BPI is now focused on coal bed methane and coal mine methane exploration and development in the Illinois Basin. There are major gas pipelines that cross or are in close proximity to all of BPI's acreages, providing a ready access to markets for future gas production. The common shares of the Company trade on the TSX Venture Exchange under the symbol "BPR".


ON BEHALF OF THE BOARD OF DIRECTORS

"James G. Azlein"


This press release is not an offer to sell or the solicitation of an offer to buy any of BPI's securities in any jurisdiction. Any such offer or solicitation will be made by BPI only in accordance with the requirements of the Securities Act of 1933, as amended. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Some of the statements contained in this press release are forward-looking in nature, outlining future expectations or anticipated operating results or financial conditions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results or conditions to differ materially from the information expressed or implied by these forward-looking statements. Some of the factors that could cause actual results or conditions to differ materially from our expectations include: (1) the inability of BPI and its placement agents to sell BPI's securities on satisfactory terms; (2) BPI's inability to obtain other financing to fund its current plan of operations; (3) the failure of new wells drilled by BPI to be commercially productive; (4) unexpected drilling conditions; (5) BPI's inability to obtain drilling equipment; (6) BPI's inability to maintain its acreage rights in the Illinois Basin or to avoid disputes over the extent of its property rights; and (7) an unexpected decline in natural gas prices. Any forward-looking statements in this press release are based on information currently available to BPI and speak only as of the date of this press release. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by applicable law, BPI undertakes no duty to update these forward-looking statements due to new information or as a result of future events.

Contact Information

  • BPI Industries Inc.
    James G. Azlein
    President and CEO
    (440)248-4200 or Toll Free : 1 800 803 3204
    (440)248-4240 (FAX)
    30775 Bainbridge Road, Suite 280 Solon, Ohio 44139 USA
    Website: www.bpi-industries.com