Compass Petroleum Ltd.
TSX VENTURE : CPO

Compass Petroleum Ltd.

February 28, 2011 16:33 ET

Compass Petroleum Ltd. and Yorktown Energy Partners VIII, L.P. Report Distribution of Common Shares to Yorktown Energy Partners VIII, L.P. Upon Conversion of Previously Issued Convertible Notes

CALGARY, ALBERTA--(Marketwire - Feb. 28, 2011) - Compass Petroleum Ltd. ("Compass" or the "Corporation") (TSX VENTURE:CPO) and Yorktown Energy Partners VIII, L.P., of New York, NY, USA, today announced that, on February 28, 2011, Yorktown Energy Partners VIII, L.P. converted (the "Conversion") $10,750,000 principal amount of unsecured subordinated convertible notes (as amended) held by it (the "Convertible Notes"), together with $369,705.75 of accrued but unpaid interest, into an aggregate of 8,236,819 common shares of Compass (representing approximately 15.7% of the 52,453,557 issued and outstanding common shares of the Corporation (after giving effect to the Conversion)). The principal amount of the Convertible Notes and accrued and unpaid interest were converted into common shares of Compass at a conversion price of $1.35 per share ($11,119,705.75 in the aggregate) in accordance with the terms of the Convertible Notes. As a result of the Conversion, Yorktown Energy Partners VIII, L.P. owns and controls 8,236,819 common shares of Compass and no longer holds any Convertible Notes or other securities convertible into or exchangeable for common shares of the Corporation.

Yook Mah, the President and Chief Executive Officer of Compass noted: "I am pleased to acknowledge the strong vote of confidence from Yorktown Energy Partners VIII, L.P., which has become one of our largest shareholders. The conversion of the notes strengthens our balance sheet and allows Compass to realize interest savings."

Following the Conversion, Yorktown Energy Partners VIII, L.P. and Yorktown Partners V, L.P. (an affiliate of Yorktown Energy Partners VIII, L.P.), together, own and control an aggregate of 28,236,819 common shares of Compass (representing approximately 53.8% of the 52,453,557 issued and outstanding common shares of the Corporation).

The Corporation has been advised that: (i) the common shares issued to Yorktown Energy Partners VIII, L.P. in connection with the Conversion were acquired by Yorktown Energy Partners VIII, L.P. for investment purposes; and (ii) in addition to the common shares acquired in connection with the Conversion, Yorktown Energy Partners VIII, L.P. may acquire additional securities of Compass, dispose of some or all of the existing (or any additional) securities of the Corporation owned by it or may continue to hold the securities of the Corporation owned by it, depending on market conditions and other considerations.

The Corporation understands that Yorktown VIII Company LP is the sole general partner of Yorktown Energy Partners VIII, L.P. Yorktown VIII Associates LLC is the sole general partner of Yorktown VIII Company LP. As a result, Yorktown VIII Associates LLC may be deemed to have the power to vote or direct the vote or to dispose or direct the disposition of the shares owned by Yorktown Energy Partners VIII, L.P. Yorktown VIII Company LP and Yorktown VIII Associates LLC disclaim beneficial ownership of the securities owned by Yorktown Energy Partners VIII, L.P. in excess of their pecuniary interests therein.

The Corporation has been advised that Yorktown Energy Partners VIII, L.P. intends to file a report under National Instrument 62-103 of the Canadian Securities Administrators in connection with the Conversion. For further information and to obtain a copy of such report please contact Mr. Graham Barnes, the Chief Financial Officer of Compass Petroleum Ltd., at (403) 261-1911 (600, 603 - 7th Ave. S.W., Calgary, Alberta T2P 2T5).

Neither the 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

  • Compass Petroleum Ltd.
    Yook L. Mah
    President and CEO
    (403) 261-1911
    or
    Compass Petroleum Ltd.
    Graham Barnes
    CFO
    (403) 261-1911
    info@compasspetroleum.com