Canadian Phoenix Resources Corp.
TSX VENTURE : CPH

Canadian Phoenix Resources Corp.

June 30, 2008 21:34 ET

Canadian Phoenix Resources Corp.-Corporate Update: Completion of Second Tranche of Marble Point Preferred Shares Private Placement for $10 Million

CALGARY, ALBERTA--(Marketwire - June 30, 2008) -

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

CANADIAN PHOENIX RESOURCES CORP. ("Canadian Phoenix") (TSX VENTURE:CPH) is pleased to announce that, with the assistance of Canadian Phoenix, Marble Point Energy Ltd. ("Marble Point") has completed the second tranche of its previously announced private placement (the "MPE Private Placement") of preferred shares for gross proceeds of $10.0 million by the issuance of 15,384,616 preferred shares at the price of $0.65 per share. The proceeds from this closing will be used by Marble Point to payout indebtedness owed to Ionic Capital Corp. (approximately $7.0 million), with the balance to be used by Marble Point as working capital for operations. One or more additional closings of the MPE Private Placement are anticipated to be completed. Marble Point has now received subscription funds totalling $43.45 million under the MPE Private Placement.

In addition, Marble Point has issued a promissory note in the amount of $550,000 to an arm's length finder acting on its behalf in connection with the MPE Private Placement, this amount being equal to 5.5% of the amount raised. Marble Point has the right to assign this note to Canadian Phoenix concurrently with the successful completion of the Marble Point Transaction, at which time Canadian Phoenix shall, subject to acceptance by the TSX Venture Exchange, issue 3,666,667 units ("Units") of Canadian Phoenix in satisfaction of the indebtedness under the note. Each Unit shall be comprised of one Canadian Phoenix Share and one non-transferable Canadian Phoenix Share purchase warrant ("Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Canadian Phoenix Share at a price of $0.20 on or before the earlier of the date that is:

(a) two years from the date of the completion of the Marble Point Transaction; and

(b) 30 days after the giving of notice of early termination by Canadian Phoenix of the Warrants, which notice may be given by Canadian Phoenix, in its sole discretion, if the closing price of the Canadian Phoenix Shares on the TSX Venture Exchange is at least $0.30 for a minimum of 30 consecutive trading days (whether or not trading occurs on such days) (the "Triggering Event") within 30 days of the Triggering Event by written notice to the finder that the exercise period of the Warrant has been reduced to 30 days following delivery of such notice.

The MPE Private Placement is being completed in conjunction with the proposed acquisition by Canadian Phoenix of a controlling interest in Marble Point (the "Marble Point Transaction"). Refer to Canadian Phoenix's news releases dated April 16, 2008 and May 1, 2008 for additional information regarding the Marble Point Transaction and the MPE Private Placement.

The Marble Point Transaction is conditional upon the execution of definitive agreements, completion of satisfactory due diligence, receipt of shareholder (if applicable), and regulatory approval, and receipt of third party consents and other conditions customary in a transaction of this nature. Canadian Phoenix will prepare an Information Circular in accordance with the form prescribed by the TSX Venture Exchange in respect of the Marble Point Transaction. Where applicable, the transactions disclosed in this news release cannot close until the required shareholder approval is obtained. There can be no assurance that these transactions will be completed as proposed or at all.

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". Canadian Phoenix currently has 583,601,540 Common Shares issued and outstanding.

ON BEHALF OF THE BOARD OF DIRECTORS OF CANADIAN PHOENIX RESOURCES CORP.

Robert J. Chenery, Co-Chairman

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 Marble Point Transaction and the MPE Private Placement. The forward-looking statements and information are based on certain key expectations and assumptions made by Canadian Phoenix, 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 Marble Point 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
    CFO
    (403) 920-0040
    (403) 920-0043 (FAX)