Probe Resources Ltd.

Probe Resources Ltd.

July 30, 2009 18:49 ET

Probe Resources Ltd.: Director Appointment, Interim Creditor Agreement and Expiration of Outstanding Warrants

THE WOODLANDS, TEXAS--(Marketwire - July 30, 2009) - Probe Resources Ltd. (the "Company" or "Probe") (TSX VENTURE:PBR) is pleased to announce the appointment of a new director. The Company also announces that it has entered into an interim creditor agreement for retirement of its outstanding trade and secured debt as well as the expiration of certain outstanding share purchase warrants.

Director Appointment

The Company has appointed Mr. Richard Buski to the Board of Directors. Mr. Buski has also been nominated and approved to serve as Chairman of the Audit Committee.

Mr. Buski was Country Managing Partner of PricewaterhouseCoopers (PWC) in Russia from 2001 through to his retirement in 2004. His responsibilities in the position included all aspects of practice management, professional risk management, financial and operational management, client relations, government relations, media relations, community involvement and partner affairs. He joined PricewaterhouseCoopers Canada in 1969, and served as the managing partner of the National Audit Client practice and the Banking Practice as well as on a number of PwC international committees. Mr. Buski was also the Global Relationship Partner for the Bank of Montreal. He obtained his B.A. (Math and Economics) from the University of British Columbia in 1967 and his C.A. in Ontario in 1972.

Mr. Buski is also a director and chair of the audit committees of Great Canadian Gaming Corporation and of East Energy Corporation and his experience will be invaluable to Probe's operating and reporting activities going forward.

In connection with Mr. Buski's appointment, the Company has granted incentive stock options to Mr. Buski to purchase up to 300,000 common shares in the capital stock of the Company. The options have a term of five years expiring July 29, 2014 and are exercisable at an exercise price of $0.15 per share.

The Board of Directors currently consists of Mr. Scott Broussard (Chairman of the Board), Mr. Desmond Balakrishnan (independent director), Mr. Bradley Culver (independent director), and Mr. Richard Buski (independent director).

Interim Creditor Agreement

As a result of falling natural gas prices, the Company's revenues have been less than projected from its two producing gas wells being the South Timbalier 214 gas well (the "ST 214 Well") and the High Island 115 well (the "HI 115 Well"). As a result of the revised revenue projections consequent to lower commodity prices, management of the Company, together with certain secured creditors, determined it to be in the best interest of the Company and its stakeholders to enter into an interim credit agreement (the "ICA") which will schedule repayment of the Company's trade payables in a timely and orderly manner consistent with the anticipated revenues from the ST 214 Well and the HI 115 Well, following deduction for general and administrative expenses of the Company.

Under the terms of the ICA, repayment will be made to all creditors with interest at an annual rate of 10%. The Company also agreed to certain restrictions on the sale of certain of the Company's assets. The Company anticipates all of the Creditors could be paid by May, 2010 presuming revenues and expenses persist at their current levels. In the event of a rise (or decline) in the price of natural gas, the repayment schedule will adjust.

The Company is extremely pleased with the completion of the ICA and the security that it brings to the Company in terms of developing its ongoing business of the development of gas reserves in the Gulf of Mexico. Scott Broussard, CEO commented: "The combination of low commodity prices and lack of alternative financing as a result of the collapse of the equity markets severely constrained the Company's ability to deal with its trade payables. The ICA now allows all of the Company's trade debts to be retired in full as well as provide the Company with the opportunity to continue to execute its business plan."

Outstanding Warrants

As of June 30, 2009, 57,376,000 of the Company's outstanding share purchase warrants expired. After the expiration of these share purchase warrants, 31,071,874 share purchase warrants remain outstanding with a weighted average exercise price of $0.37.

About Probe Resources Ltd.

The Company, along with its wholly-owned subsidiary Probe Resources US Ltd. located in The Woodlands, Texas, is an oil and natural gas exploration and production company focused on generating, acquiring, developing, and operating drilling prospects within the Texas and Louisiana Outer Continental Shelf of the Gulf of Mexico.


Scott Broussard, Chief Executive Officer and Chairman of the Board

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities in the United States. The Company's securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Statements in this press release may contain forward-looking information including expectations of future operations (including drill rig commitments and use of proceeds), commerciality of any gas discovered, production rates, operating costs, commodity prices, administrative costs, commodity price risk management activity, acquisitions and dispositions, capital spending, access to credit facilities, income and oil taxes, regulatory changes, and other components of cash flow and earnings. The reader is 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 the Company. 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, or reservoir performance, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information.

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