Canadian Phoenix Resources Corp.
TSX VENTURE : CPH

Canadian Phoenix Resources Corp.

April 17, 2009 16:01 ET

Canadian Phoenix Resources Corp.: Divestment of Gross-Overriding Royalty and Suspension and Negotiations of Credit Facilities

CALGARY, ALBERTA--(Marketwire - April 17, 2009) -

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 it has closed a transaction with another public junior resource company to divest of a gross-overriding royalty that the company acquired in the Bonnie Glen Unit of central Alberta. The purchase price of $1 million will be paid in three installments. The first installment of $500,000 was paid upon closing. At the time of closing, the purchaser agreed to provide Canadian Phoenix with a note for $500,000, secured by the assets of the purchaser and subordinated to the purchaser's primary lender. The second payment of $250,000 (plus interest) is due June 30, 2009 and the final payment of $250,000 (plus interest) is due December 31, 2009. The purchaser has an option to repay the notes at any time without penalty.

SUSPENSION AND NEGOTIATIONS OF CREDIT FACILITIES

Canadian Phoenix also announces that it has received notification from its financial institution that its $13 million credit facility has been suspended, effective April 15, 2009, pending further discussion. As announced in Canadian Phoenix's press release dated March 13, 2009, this facility was cross-guaranteed with Serrano Energy Ltd. ("Serrano"), a private company owned 56.8% by Canadian Phoenix. This suspension is due to events of default under the facility resulting from financial conditions of Serrano. No amounts had been drawn on the facility by Canadian Phoenix or Serrano.

Canadian Phoenix and Serrano have each commenced discussions with the financial institution to replace the current suspended credit facility with individual facilities based solely on each company's assets and without a cross-guarantee. As discussions are in the early stages, there is no certainty of approval. Canadian Phoenix will provide further updates regarding the financial condition of Serrano by the end of April when Serrano's year-end audited financial statements are finalized and approved, as well as release the year-end consolidated audited results of Canadian Phoenix, including certain audited financial information of Marble Point Energy Ltd.

About Canadian Phoenix Resources Corp.

Canadian Phoenix 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 oil and gas assets located in the Western Canadian Sedimentary Basin. Strategic corporate acquisitions promote partnerships for the future development of acquired or targeted oil and gas assets. Canadian Phoenix's shares trade on the TSX Venture Exchange under the symbol "CPH".

FORWARD-LOOKING STATEMENTS Certain information set forth in this document, including management's assessment of the ability to secure another credit facility, the financial viability of its subsidiary, and the ability of the industry partner to make future installments, contain forward-looking statements. In particular, forward-looking statements included in this document, include but are not limited to, statements with respect to the approval of another credit facility, the financial condition of its subsidiary, and the future receipt of sale proceeds. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Canadian Phoenix's control, including completion of the Arrangement, the impact of general economic conditions, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. In making such forward-looking statements Canadian Phoenix has made certain assumptions concerning the sufficiency of budgeted capital expenditures in carrying out planned activities; the availability and cost of labour and service; and the receipt of applicable approvals. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Canadian Phoenix's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Canadian Phoenix will derive therefrom. Canadian Phoenix disclaims any intention or obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise, except as required pursuant to applicable securities laws.

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

Contact Information

  • Canadian Phoenix Resources Corp.
    Thomas P. Stan
    President and Chief Executive Officer
    (403) 920-0040
    (403) 920-0043 (FAX)