October 19, 2009 19:38 ET

Circumpacific Energy Corporation: News Release

CALGARY, ALBERTA--(Marketwire - Oct. 19, 2009) - Circumpacific Energy Corporation (TSX VENTURE:CER) ('Circumpacific') is an independent oil and natural gas producer engaged in the acquisition, exploration, production and development of oil and natural gas properties in North America.

Drillsearch Energy Limited (ASX: DLS) ('Drillsearch'), an Australian company, holds approximately 79.5% of issued share capital in Circumpacific.

The reason for this Press Release is to notify shareholders of legal proceedings brought by Drillsearch in the Supreme Court of British Columbia on October 14, 2009 ('Drillsearch proceedings').

The Drillsearch proceedings relate largely to the matters set out in Circumpacific's Press Release of September 30, 2009. Drillsearch seeks, among other things:

  • an injunction preventing Mr. Peter Simpson from acting as a director of Circumpacific;
  • orders restraining the company and its directors from making any material changes to the business or affairs of Circumpacific prior to its upcoming shareholders meeting;
  • orders governing conduct of the forthcoming general meeting on November 26, 2009.

Many assertions in the Drillsearch proceedings are flawed, slanted or incomplete. It is also puzzling why Drillsearch would bring such action barely one month before the general meeting on November 26, 2009, given that Drillsearch will seek at that meeting to remove both independent directors together with Mr Simpson, and to replace them with Drillsearch's own representatives.

The board of Circumpacific will not abdicate the duties and responsibilities it owes under Canadian law to all of its shareholders and the company as a whole. The board is required by law to manage and supervise the business and affairs of the company, and has the express authority to do so, in the interests of all shareholders, not merely Drillsearch. The board will not allow one shareholder to reign over your directors and senior management in pursuit of its own commercial objectives.

Mr. Simpson remains a director, and the Chief Executive Officer, of Circumpacific. The board of Circumpacific resolved unanimously on September 10, 2009, that no valid resignation by Mr. Simpson as a director had been received by the company or its lawyers. It is noted that Drillsearch's notice of requisition dated July 29, 2009, described Mr. Simpson as a director of Circumpacific, and the very nature of that requisition constitutes an acknowledgment by Drillseach that Mr. Simpson is and remains a director.

Circumpacific is presently obtaining legal advice from its Canadian lawyers in relation to the Drillsearch proceedings, and will update shareholders shortly.

A copy of the notice calling the meeting, together with the Information Circular and other relevant material, is available on SEDAR at or the Company's website

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information