Canadian Phoenix Resources Corp.
TSX VENTURE : CPH

Canadian Phoenix Resources Corp.

June 12, 2008 07:00 ET

Canadian Phoenix to Acquire Assets for $14.25 Million & Termination of Transaction With First West Petroleum Inc.

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

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

CANADIAN PHOENIX RESOURCES CORP. ("Canadian Phoenix" or "CPH") (TSX VENTURE:CPH) is pleased to announce that it has executed an agreement of purchase and sale with Blue Parrot Energy Inc. ("Blue Parrot") pursuant to which it has agreed, subject to the satisfaction of certain conditions including the completion of satisfactory due diligence, to acquire certain of Blue Parrot's oil and gas assets in consideration of $14.25 million. The purchase price will be paid by the issue of 95 million units ("Units") of Canadian Phoenix at the 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 transaction upon payment of the exercise price of $0.20 per Common Share. If the closing price of the Common Shares on the TSXV is at least $0.30 for a minimum of at least 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.

A description of the oil and gas assets to be purchased by Canadian Phoenix 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 (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 on these lands, one natural gas and one oil.

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 and two suspended 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 98.627% working interest in 2,400 acres (2,375 acres net) located in the Bonnie Glen area of central Alberta approximately 60 kilometres south of Edmonton. There are 17 producing oil wells on these lands.

An independent engineering report prepared in respect of oil and gas assets to be purchased by Canadian Phoenix will be filed with the TSX Venture Exchange in due course.

The Blue Parrot transaction is an arm's length transaction that is conditional upon the completion of satisfactory due diligence, receipt of shareholder and regulatory approval, and receipt of third party consents and other conditions customary in a transaction of this nature. It is anticipated that Canadian Phoenix will prepare an information circular in accordance with the form prescribed by the TSX Venture Exchange in respect of the transaction with Blue Parrot. There can be no assurance that this transaction will be completed as proposed or at all. Canadian Phoenix anticipates that the transaction with Blue Parrot will be completed at or about the same time as completion of Canadian Phoenix's previously announced transactions with Serrano Energy Ltd. and Marble Point Energy Ltd.

Canadian Phoenix also announces that the proposed transaction with First West Petroleum Inc. described in its news release of December 21, 2007 has been terminated.

Canadian Phoenix is also pleased to announce that last outstanding debentures in the aggregate amount of $2,050,140 have been converted into 24,601,680 Common Shares in accordance with the terms of the trust indenture dated April 11, 2007, as amended, between Canadian Phoenix and Computershare Trust Company of Canada. Following the conversion of the debentures, Canadian Phoenix has 583,601,540 Common Shares issued and outstanding. All debentures issued by Canadian Phoenix have now been converted into Common Shares.

Canadian Phoenix Resources Corp. is a publicly traded junior oil and gas exploration, development and production company with operations in Western Canada. Canadian Phoenix is pursuing a corporate strategy of being a consolidator of undervalued oil and gas assets located in the Western Canadian Sedimentary Basin. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CPH".

This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities of Canadian Phoenix within the United States. Securities of Canadian Phoenix have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, none of the securities of Canadian Phoenix may be offered or sold in the United States or to U.S persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities law or an exemption from such registration is available.

Forward-Looking Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. More particularly and without limitation, this press release contains forward looking statements and information concerning completion of the Blue Parrot transaction and the assessment of Blue Parrot's petroleum and natural gas production, undeveloped land holdings, business strategy, future development and growth opportunities, prospects, asset base and anticipated benefits from the combination. The forward-looking statements and information are based on certain key expectations and assumptions made by Blue Parrot, including expectations and assumptions concerning prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates and reserve volumes, receipt of regulatory and security holder approvals, the performance of existing wells, the success obtained in drilling new wells, the sufficiency of budgeted capital expenditures in carrying out planned activities, the availability and cost of labour and services and the impact of the Province of Alberta's new royalty regime. Although Canadian Phoenix believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward looking statements and information because Canadian Phoenix can give no assurance that they will prove to be correct.

Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of reserve estimates, the uncertainty of estimates and projections relating to reserves, production, costs and expenses, health, safety and environmental risks, commodity price and exchange rate fluctuations, marketing and transportation, loss of markets, environmental risks, competition, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, ability to access sufficient capital from internal and external sources, failure to obtain required regulatory and other approvals, and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. There are risks also inherent in the nature of the Blue Parrot transaction, including incorrect assessment of the value of the assets to be acquired, and failure to obtain the required security holder, regulatory and other third party approvals. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward-looking statements and information contained in this press release are made as of the date hereof and Canadian Phoenix undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.


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

Contact Information

  • Canadian Phoenix Resources Corp.
    Doug Bailey
    (403) 920-0040
    (403) 920-0043 (FAX)