BrazAlta Resources Corp.

BrazAlta Resources Corp.

December 29, 2008 16:05 ET

BrazAlta Resources Announce Sale of BCH to Allis-Chalmers

CALGARY, ALBERTA--(Marketwire - Dec. 29, 2008) -


BrazAlta Resources Corp. (TSX VENTURE:BRX) ("BrazAlta" or the "Corporation") is pleased to announce that it has entered into a definitive Share Purchase Agreement ("SPA") with Allis-Chalmers Energy Inc. ("Allis Chalmers") for the sale of all of BrazAlta's remaining interest in BCH Ltd. and its wholly owned subsidiary BCH Energy do Brasil Servicos de Petroleo Ltda. ("BCH Energy Services" or "BCH"), its Brazilian drilling subsidiary. The closing date of the transaction is expected to be December 31, 2008 and will result in Allis-Chalmers owning all of the outstanding capital stock of BCH.

Under the terms of the SPA, Allis Chalmers will assume BrazAlta's US$23.5 million share of BCH's outstanding term debt facility with Standard Bank Plc., will assume its US$40 million convertible debenture into BCH, and will pay BrazAlta a cash consideration of US$5 million, for a total transaction value of US$68.5 million.

BrazAlta intends to apply the US$5 million cash proceeds from the sale to partial settlement of its outstanding US$6.6 million mezzanine loan facility with Standard Bank Plc associated with the purchase of the Rancho Hermoso exploration and producing assets in Colombia.

The proceeds from the sale of BCH, together with those from the recent sale of the oil hedge agreement with Standard Bank Plc announced on December 10, 2008, have been used to reduce the Corporations net total debt by US$73.5 million. Following this transaction, the Corporation will have a net outstanding debt of US$19 million.

BrazAlta is a Canadian based international oil and gas corporation with operations in Colombia, Brazil, Guyana, Northern Ireland and Canada. BrazAlta is publicly traded on Toronto Venture Exchange (TSX VENTURE:BRX). Additional information may be found at and the Corporation's public filings may be found at

This press release may contain statements within the meaning of safe harbour provisions as defined under Securities Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation. A barrel of oil equivalent (boe) is derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil and may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead, especially in various international jurisdictions.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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