Mahalo Energy Ltd.

Mahalo Energy Ltd.

November 07, 2006 08:30 ET

Mahalo Announces Disposition of Non-Core Assets, Banking Update and Corporate Restructuring

CALGARY, ALBERTA--(CCNMatthews - Nov. 7, 2006) -

(Not for distribution to U.S. newswire services or for dissemination in the United States of America)

Mahalo Energy Ltd. (TSX:CBM) (the "Company" or "Mahalo") is pleased to announce that it has sold certain non-core conventional oil and gas assets and facilities, for proceeds of approximately $11.7 million, subject to standard industry adjustments. There were 11 properties in the package located in Northern, Central and Southern Alberta producing approximately 275 boepd. This disposition reflects the Company's strategic plan of divesting of certain non-core assets in order to focus on unconventional coal bed methane and shale opportunities.

Mahalo has now combined all of its credit facilities under a single banking institution and has access to $53 Million (CDN). Mahalo also has the ability to negotiate a development line facility with this institution.

Mahalo announces effective today Mr. Gary Gardiner, Chief Executive Officer of Mahalo, has resigned his position as a director and Chief Executive Officer of Mahalo. During his tenure with Mahalo, Gary has added strong value and has decided to pursue new endeavors. Gary will be available for consulting assignments to Mahalo for strategic projects. Mahalo thanks Gary for his contribution and wishes him continued success in the future.

Mr. Duncan Chisholm, currently President and Chief Operating Officer, will assume the title and responsibility of President and Chief Executive Officer.

Mahalo is also pleased to announce that the Company has been increasing its development initiatives in its coal bed methane and shale prospects located in Oklahoma. Mr. Art Flaws, Senior Vice President of Mahalo, will be transferring to Tulsa, Oklahoma and will be responsible for overall management of our exciting growth story in the United States. Art will assume the Chief Operating Officer position for Mahalo Energy Inc. (USA).

About Mahalo

Mahalo is a junior, unconventional natural gas producer, focusing on the production and development of deeper Mannville coal bed methane deposits in western Canada and is successfully developing both coal bed methane and shale gas prospects in the United States.

Disclosure provided herein in respect of boe units may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Information in this press release contains forward-looking statements including expectations of future production and components of cash flow and earnings. Investors are cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Mahalo. These risks include, but are not limited to; the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks including, without limitation, blowouts and spills, and the uncertainty of estimates and projections of production, costs and expenses. The risks outlined above should not be construed as exhaustive. Investors are cautioned not to place undue reliance on any forward-looking information. Mahalo undertakes no obligation to update or revise any forward-looking statements except as required by applicable securities laws.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Mahalo Energy Ltd.
    Duncan Chisholm
    President and Chief Executive Officer
    (403) 716-3114
    (403) 451-3501 (FAX)
    Mahalo Energy Ltd.
    Bill Gallacher
    Chairman of the Board
    (403) 233-4451
    (403) 237-0903 (FAX)
    Mahalo Energy Ltd.
    540, 734 - 7th Avenue S.W.
    Calgary, Alberta T2P 3P8
    (403) 451-3500
    (403) 451-3501 (FAX)