Canadian Phoenix Resources Corp.
TSX VENTURE : CPH

Canadian Phoenix Resources Corp.

June 26, 2008 13:14 ET

Canadian Phoenix Resources Corp.: News Release

- APPOINTMENT OF PRESIDENT & CHIEF EXECUTIVE OFFICER - - APPOINTMENT OF CHIEF FINANCIAL OFFICER - - INCREASE IN PRIVATE PLACEMENT FINANCING

CALGARY, ALBERTA--(Marketwire - June 26, 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 the appointment of Mr. Thomas P. "Tom" Stan as President & Chief Executive Officer effective July 15, 2008, the appointment of Mr. Douglas Bailey as Chief Financial Officer effective immediately and an increase in the size of its previously-announced private placement financing to up to $125 million.

Appointments

President & Chief Executive Officer - Thomas P. Stan

Thomas P. "Tom" Stan has an extensive 30-year background in finance and in oil and gas mergers & acquisitions, most recently as the President & CEO of Sound Energy Trust, which he built to over 10,000 boe/d of balanced production and long-life reserves prior to its merger with Advantage Energy Trust in late 2007. He began his career in finance in 1980 with Amerada Hess Ltd., the New York-based independent oil and gas company, where he rose to the position of Vice-President Corporate Development for Canada. During that period, he led the team that targeted and acquired Placer-Cego for over $300 million, and was a member of the strategic management team responsible for the Amerada Hess Canada corporate disposition in 1996. He is the former Vice President Corporate Development of Petro-Canada (1996-2000) and was responsible for the entire up- and downstream corporate planning, acquisitions, divestitures and mergers during that time. He transacted over $600 million in asset-based rationalization of Petro-Canada's Western Canada business unit and his conventional Western Canada A&D function resulted in a net booking increase in reserves of over 500 Bcf. He left Petro-Canada in 2000 and joined Total Energy Services as its Chairman and CEO, instituting a business strategy of organic growth that saw the company increase its market capitalization from $22 million to well over $350 million. He continues to sit as a member of the board of directors of Total Energy Services Trust.

"The Board of Directors is extremely pleased to welcome Tom Stan to the Company. We fully expect his industry and financial experience to dovetail completely with the Canadian Phoenix model, providing the leadership required for the Company to execute on its strategy as a consolidator of under-valued oil and gas assets and promoter of experienced E&P management teams", said Robert Chenery, who will step down as President and CEO, but will remain with Canadian Phoenix as Co-Chairman of the Board.

Chief Financial Officer - Douglas Bailey

Douglas Bailey (CGA) brings extensive experience in the finance and accounting industry, including in the oil and gas sector, to Canadian Phoenix. He began his accounting career in commercial mortgage lending, and later was employed with Aecon Infrastructure as project accountant and controller, overseeing financial, accounting, and business development aspects of large domestic and international construction projects. For the past 10 years, he has worked in oil and gas finance and accounting, including deal structure and financial analysis on a multi-billion dollar oil sands construction project, and in the restructuring of Arapahoe Energy, Magnus Energy and Blue Parrot Energy. Mr. Bailey has been engaged as a consultant in senior accounting and finance positions at Canadian Phoenix since April 2007.

"Doug Bailey is a natural appointment to CFO within the Company, having been instrumental in several recent junior oil and gas restructurings including providing invaluable assistance to the management of Canadian Phoenix through its restructuring and in building the Canadian Phoenix model. His finance industry background will definitely help to move the Company forward" said Mr. Chenery.

Financing

Increase in Private Placement Financing & of Subscription Receipt Financing

Canadian Phoenix announces an increase in the size of its previously-announced private placement financing to be conducted in conjunction with its transaction (the "Marble Point Transaction") with Marble Point Energy Ltd. ("Marble Point") by an additional $15 million for a total financing size of up to $125 million (the "Financing"). The maximum amount to be raised under the Financing has been increased to provide funds to accelerate and expand the development drilling programs on its properties with a view to realizing upon the opportunities provided by rising commodity prices. To date, Canadian Phoenix has assisted Marble Point with its completion of debt and preferred share financings in the total amount of $75.45 million. For additional information regarding the Financing and the Marble Point Transaction please see Canadian Phoenix's news releases dated February 29, 2008, April 16, 2008, April 29, 2008 and May 1, 2008.

As part of the Financing, Canadian Phoenix will also complete a private placement of up to 143,666,667 subscription receipts ("Subscription Receipts") at a price of $0.15 per Subscription Receipt for gross proceeds of up to $21,550,000 (the "Subscription Receipt Private Placement"). Each Subscription Receipt will be deemed to be exchanged, without payment of any additional consideration, for one Unit upon the Escrow Release Date (as defined herein). The gross proceeds received on the Subscription Receipt Private Placement will be deposited in escrow, such escrowed funds to be released on the date that all of the conditions to the completion of the Marble Point Transaction are met or waived ("Escrow Release Date"). If the Escrow Release Date does not occur on or before the date that is 115 days from the closing of the Subscription Receipt Private Placement (the "Final Escrow Deadline"), such escrowed funds plus interest shall be returned pro rata to each holder of the Subscription Receipts in exchange for the cancellation of the Subscription Receipts of such holder.

In addition, with the assistance of Canadian Phoenix, it is anticipated that Marble Point will complete one or more additional tranches of its previously-announced private placement (the "MPE Private Placement") of preferred shares for gross proceeds of an additional $11 million prior to June 30, 2008. The proceeds will be used by Marble Point to pay $7.0 million of indebtedness owed to secured lenders, with the balance to be used by Marble Point as working capital for operations. The MPE Private Placement is being conducted in conjunction with the Financing. It is anticipated that the Marble Point preferred shares issued under the MPE Private Placement will be redeemed prior to or concurrently with the completion of the Marble Point Transaction with the redemption amount received by the holders thereof then immediately used to subscribe for Units of Canadian Phoenix. Canadian Phoenix anticipates using the proceeds received by it to pay, in part, the subscription price for its purchase from treasury of that number of common shares of Marble Point equal to approximately 60% of the number of Marble Point common shares then outstanding. Please refer to Canadian Phoenix's news releases dated April 16, 2008 and May 1, 2008 for additional information regarding the MPE Private Placement.

Each Unit issued pursuant to the Financing will be issued at a price of $0.15 per Unit and will consist of one common share ("Common Share") of Canadian Phoenix and one Common Share purchase warrant ("Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share at a price of $0.20 on or before the earlier of the date that is two years from the completion of the Financing and 30 days after the giving of notice of early termination by Canadian Phoenix. Canadian Phoenix may, in its sole discretion, provide such notice if the closing price of the Common 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 Canadian Phoenix Warrantholder that the exercise period of the Warrant has been reduced to 30 days following delivery of such notice.

The net proceeds of the Financing will be used by Canadian Phoenix to satisfy any unfunded obligation to provide up to $100 million to Marble Point (see Canadian Phoenix's news releases dated February 29, 2008, April 16, 2008 and May 1, 2008) by way of debt and/or equity, to conduct acquisitions, to fund exploration and development programs on its properties and for general working capital purposes.

It is not anticipated that the Financing will result in a change of control of Canadian Phoenix. The Financing is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and, if required pursuant to TSX Venture Exchange requirements, shareholder approval. Where applicable, the Financing cannot close until the required shareholder approval is obtained. There can be no assurance that the Financing 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 Financing. 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.
    Robert J. Chenery
    Co-Chairman
    (403) 920-0040
    (403) 920-0043 (FAX)