Petrobank Energy and Resources Ltd.

Petrobank Energy and Resources Ltd.

January 31, 2012 17:45 ET

Petrobank Announces Sale of May River Property and Executive Appointment

CALGARY, ALBERTA--(Marketwire - Jan. 31, 2012) - Petrobank Energy and Resources Ltd. (TSX:PBG) announces that we have entered into an agreement with Grizzly Oil Sands Ulc. to sell our May River property, which includes the Conklin demonstration project, for gross cash proceeds of $225 million subject to normal closing adjustments. Proceeds from this transaction will initially be used to repay outstanding bank debt and will result in Petrobank having a significant positive cash and working capital balance.

This sale allows us to focus our resources and expertise on our near and medium-term conventional heavy oil growth opportunities. Petrobank's 2012 focus is the commercialization of our Kerrobert THAI(R) project targeting increased production and reduced per-barrel operating costs. The May River disposition provides additional balance sheet flexibility to further evaluate our properties at Dawson, Plover and Luseland, as well as pursue additional opportunities.

The transaction is subject to satisfaction of certain customary conditions, including receipt of required regulatory approvals, and is expected to close by the end of February 2012. As part of this sale, the May River regulatory application is expected to be withdrawn.

TD Securities Inc. and UBS Securities Canada Inc. acted as financial advisors to Petrobank on this transaction.

Executive Appointment

Petrobank is also pleased to announce the appointment of Mr. Rob Richardson as Vice President, Exploitation. Mr. Richardson's career spans more than 20 years in the industry, and includes extensive heavy oil experience. Mr. Richardson is a member of the Association of Professional Engineers, Geologists, and Geophysicists of Alberta. We look forward to Mr Richardson's contribution to the future growth of our Company.

Forward Looking Statements: Certain information provided in this press release constitutes forward-looking statements. Specifically, this press release contains forward-looking statements relating to our proposed sale of the May river property, the timing of such sale and our use of the proceeds. The forward-looking statements are based on certain key expectations and assumptions, including expectations and assumptions concerning the ability of the parties to the sale to satisfy conditions and complete the transaction. Although we believe that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because we can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to risks that the proposed sale of the assets is not completed as a result of a failure to satisfy one of the conditions thereto. Except as may be required by applicable securities laws, Petrobank assumes no obligation to publicly update or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada. The Company operates high-impact projects through two business units and a technology subsidiary. Petrobank's 59% owned TSX-listed subsidiary, PetroBakken Energy Ltd. (TSX:PBN), is an oil and gas exploration and production company combining light oil Bakken and Cardium resource plays with conventional light oil assets. Whitesands Insitu Partnership, a partnership between Petrobank and its wholly-owned subsidiary Whitesands Insitu Inc., applies Petrobank's patented THAI® heavy oil recovery process in the field. THAI® is an evolutionary in-situ combustion technology for the recovery of bitumen and heavy oil. THAI® and CAPRI® are registered trademarks of Archon Technologies Ltd., a wholly-owned subsidiary of Petrobank Energy and Resources Ltd., for specialized methods for recovery of oil from subterranean formations through in-situ combustion techniques and methodologies with or without upgrading catalysts. Used under license by Petrobank Energy and Resources Ltd.

Contact Information

  • Petrobank Energy and Resources Ltd.
    John D. Wright
    President and Chief Executive Officer

    Petrobank Energy and Resources Ltd.
    Chris J. Bloomer
    Senior Vice President and Chief Operating Officer, Heavy Oil

    Petrobank Energy and Resources Ltd.
    Peter Cheung
    Vice President Finance and Chief Financial Officer