Canoro Resources Ltd.

Canoro Resources Ltd.

September 20, 2007 07:41 ET

Canoro Secures US$10 Million Investment Toward Amguri Development

CALGARY, ALBERTA--(Marketwire - Sept. 20, 2007) - Canoro Resources Ltd. (TSX VENTURE:CNS) has entered into an agreement with Gemini Oil & Gas Fund II, L.P., a private fund based in Jersey, Channel Islands, whereby the Fund will provide limited-recourse funding of US$10 million for appraisal and development drilling in Canoro's Amguri Field in Assam, India.

The funding will allow Canoro to drill additional appraisal and development wells in the field, beyond Amguri 10B and Amguri 11 without accessing the equity markets. The Fund will not earn a participating interest in the field, nor will it be responsible for future capital costs. The Fund will only be entitled to receive repayments based on Canoro's 60% share of gross revenue from the Amguri Field ranging from 7% before recovery of the original US$10 million, declining to 3.5% thereafter.

The agreement also provides that Canoro shall have the option between September 2010 and December 31, 2012 to buy back the Fund's entitlement, after recovery of initial investment with a pre-determined payment of US$12.75 million. If such option is exercised by Canoro, the Fund will be granted, subject to TSX Venture approval, warrants to subscribe for five million common shares of the Company, exercisable within six months from the date of issue at a subscription price of CAD$2.00 per share.

"This transaction benefits existing shareholders by providing additional funds for the early stage development of Amguri without accessing either the debt or equity markets at this time," commented Les Kondratoff, Canoro's President and CEO.

Canoro is a Canadian-based international oil and gas company operating in the Assam/Arakan basin of northeast India. Canoro is the operator of Amguri field with a 60% working interest. Canoro is the operator with a 65% working interest in the AA-ON/7 exploration block. Canoro also has a 15% non-operated working interest in the AA-ONN 2003/2 exploration block.

Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.

This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Canoro's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Canoro's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances 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, including the amount of proceeds, that Canoro will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Canoro or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Canoro does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Canoro Resources Ltd.
    Rob McInnis
    Vice President, Business Development and Corporate Affairs
    (403) 543-5748
    (403) 543-5740 (FAX)
    Canoro Resources Ltd.
    2810, 715 - 5th Ave SW
    Calgary, Alberta T2P 2X6