Petrichor Energy Inc.

June 30, 2011 15:25 ET

Petrichor Energy Inc.: Corporate Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 30, 2011) - Petrichor Energy Inc. (TSX VENTURE:PTP)(FRANKFURT:YQN) ("Petrichor" or the "Company") - At the Annual and Special General Meeting of the Company held on October 15, 2010, shareholders approved by special resolution a plan of reorganization (the "Plan") of the Company's Mississippi subsidiary, Odyssey Petroleum Corp. (U.S.) ("the Debtor") under Chapter 11 of the U.S. Bankruptcy Code. Further to the Company's September 17, 2010 News Release and as disclosed in the Company's February 10, 2011 News Release, Iroquois Capital Opportunity Fund ("IOC") retracted its offer to acquire the shares of the Debtor and ODE's lock up agreement with IOC expired in January 2011, allowing the Company to solicit other offers.

On May 24, 2011, the US Bankruptcy Court in Mississippi accepted a "stalking horse bid" from an unrelated party who had offered to purchase certain assets of the Debtor for US$9,600,000 and certain Mississippi assets owned by the parent company, Petrichor, for US$1,900,000.

The court ordered that a public auction would be held for the Debtor's assets, with the stalking horse bid of US$9,600,000 setting the minimum bid price. Two qualified unrelated bidders were approved by the court, including a designate of IOC.

On June 10, 2011 the auction resulted in a final bid to purchase the Debtor's assets, subject to certain conditions, for US$12,000,000, which was accepted by the court.

The sale of the Debtor's assets has now closed into escrow, with the proceeds to be administered under the direction of the Bankruptcy Court. The proceeds of the sale will be utilized to fully pay creditors of the Debtor in the near future, with all remaining funds to be returned to Petrichor once the plan has been completed.

The Debtor continues to operate under Chapter 11 creditor protection while the plan to distribute payments to the creditors continues.

The purchaser is also acquiring certain of Petrichor's assets for US$1,900,000. The Company will retain an approximate 20% working interest in the Verba, Mississippi oil and gas field, a 100% working interest in the Barber Creek, Mississippi oil and gas field, and a 100% interest in the post Chapter 11 Odyssey US.

The Chapter 11 proceedings are currently expected to conclude within the next three months.


Richard Barnett, Chief Financial Officer

This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including without limitation statements regarding the expected application of sale proceeds and the completion of Chapter 11 proceedings, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's plans or expectations include without limitation court, regulatory and creditor approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.

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

  • Petrichor Energy Inc.
    Richard Barnett
    Chief Financial Officer
    (604) 718-2800
    (604) 718-2808 (FAX)