Canoel International Energy Ltd.

Canoel International Energy Ltd.

August 05, 2011 18:24 ET

Canoel Divests Its Interest in Tunisian Assets

CALGARY, ALBERTA--(Marketwire - Aug. 5, 2011) -


Canoel International Energy Ltd. (TSX VENTURE:CIL) ("Canoel" or the "Company") is pleased to announce the divestment of its interest in the Tunisian blocks of Jorf, Bazma and Sud Tozeur (the "Tunisian Blocks"), which it acquired in late November 2008.

Pursuant to a Termination and Release Agreement, Canoel and CYGAM Energy Inc. ("CYGAM") have terminated the Farmout Agreement wherein Canoel was granted the opportunity to participate in certain oil and gas operations in order to earn an interest in the Tunisian Blocks, as well as the Memorandum of Understanding ("MOU") whereby Canoel acquired the opportunity to participate in oil and gas operations in order to earn a further interest in certain of the Tunisian Blocks.

Pursuant to the Termination and Release Agreement, CYGAM has agreed to pay $621,278 (the "Termination Fee"), an amount equal to those costs paid by Canoel pursuant to the Farmout Agreement, in exchange for the assignment and transfer of any rights earned by Canoel under the Farmout Agreement or the MOU. CYGAM has agreed to pay $50,000 of the Termination Fee to Canoel within 5 days of the approval of the Termination and Release Agreement by the board of directors of both of CYGAM and Canoel, and the balance of the Termination Fee, $571,278, no later than March 31, 2012. Further, Canoel has surrendered its deposit of $490,000 paid to CYGAM pursuant to the terms of the Farmout Agreement (the "Deposit"), and CYGAM has agreed to pay Canoel an amount up to the amount of the Deposit, subject to certain conditions.

Canoel is focusing its activities in production acreages, and is negotiating and possibly progressing in the acquisition of oil & gas producing fields in Argentina, Italy and Russia.

While Canoel remains committed to the activity of exploration, the Company wants mainly to act-as well in the in exploration activity-only as operator rather than as a participant in acreage operated by others.

The main Canoel assets are two fully operated, 100% controlled and owned, oil producing properties in Argentina.

As a consequence the opportunity for the divestment of the Tunisian properties was taken very swiftly as it became available as this opportunity for disposal fits the Company strategy to be always (if possible) the operator in the properties (exploration or production) it invests in.

Certain information in this press release is forward-looking and related to anticipated financial performance, events and strategies. When used in this context, words such as "will", "anticipate", "believe", "plan", "intend", "target" and "expect" or similar words suggest future outcomes. By their nature, such statements are subject to significant risks, assumptions and uncertainties, which could cause the Company's actual results and experience to be materially different than the anticipated results. In particular, forward-looking information and statements include, but are not limited to: (i) expectations related to possible acquisitions in of oil and gas producing fields in Argentina, Italy and Russia; and (ii) the Company's business strategy and outlook.

These statements are based on certain assumptions and analysis made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate. The material factors and assumptions used to develop these forward-looking statements include, but are not limited to: (i) assumption the Company will continue to focus its activities in production acreages; and (ii) assumption the Company will continue to prefer the role of operator rather than as a participant in oil and gas average operated by others.

Whether actual results, performance or achievements will conform to the Company's expectations and predictions is subject to a number of known and unknown risks and uncertainties which could cause actual results to differ materially from the Company's expectations. Such risks and uncertainties include, but are not limited to, risks and uncertainties relating to: (i) political and economic conditions in the countries in which the Company operates or may operate; (ii) fluctuations in foreign exchange rates; and (iii) the Company's ability to access external sources of debt and equity capital.

Readers are cautioned not to place undue reliance on forward-looking statements as actual results could differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements. Except as required by law, the Company disclaims any intention and assumes no obligation to update any forward-looking statement.

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.

Contact Information

  • Canoel International Energy Ltd.
    Jose Ramon Lopez Portillo
    Chairman of the Board
    (403) 829-1160

    Canoel International Energy Ltd.
    Andrea Cattaneo
    CEO & President
    (403) 829-1160