Ryland Oil Corporation

Ryland Oil Corporation

November 10, 2009 08:02 ET

Ryland Oil Provides Corporate Update and Announces Debt Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 10, 2009) - Ryland Oil Corporation (TSX VENTURE:RYD) ("Ryland" or "the Company") is pleased to provide an update concerning its exploration activities with its joint venture partner, TriAxon Resources Ltd. (which announced yesterday that it has entered into an agreement under which it will be acquired by Crescent Point Energy Ltd).

Ryland's exploration focus continues to be on the Bakken Formation in its 81 sections in the Flat Lake area of Southeast Saskatchewan which it has joint ventured with TriAxon. The stimulated horizontal well drilled by TriAxon was put on pump in August, 2009, and its managed production rate of 200 barrels of oil per day announced in September has increased to a current production rate of approximately 250 barrels of oil per day. This was the third earning well drilled by TriAxon under the joint venture, with TriAxon paying 100% of the costs to drill, complete and equip the well to earn a 50% working interest in a portion of Ryland's surrounding acreage. TriAxon has recently successfully drilled a fourth earning horizontal well located approximately 4 miles northeast of the 1-22-1-14W2 well, and is preparing the well for fracture stimulation. In September TriAxon formally notified Ryland that it has elected to drill the next option well, approximately 5 miles west of the 1-22 well. TriAxon has indicated that it is considering spudding the well before year-end. TriAxon may elect to drill a total of 7 earning wells to fully earn in to its rights for the Bakken Formation across the Company's extensive Flat lake acreage position.

Ryland also announces that it is proceeding with a syndicated loan of up to CDN$8 million, which will be used to pay outstanding debt obligations and for general working capital. The loan will be for a term of one year and bear interest at the rate of 10% per annum, calculated annually. The loan will repayable as to interest only quarterly, with the final interest payment plus principal being due and payable on the first anniversary of the date of closing; provided that if Ryland enters into any transaction by way of merger, amalgamation or plan of arrangement, or is the subject of a takeover bid, resulting in new shareholders holding more than 50% of Ryland's outstanding shares, the loan plus accrued interest will become due and payable on completion of that transaction. The loan will be repayable by the Company at any time prior to the due date and will be secured by a charge on the assets of Ryland and its wholly-owned subsidiary, Pebble Petroleum Inc. As an inducement to grant the loan, Ryland will issue to the lenders voting common shares of Ryland equal to 20% of the principal amount of the loan at a deemed price of CDN$0.35 per share. The shares will be subject to a hold period expiring 4 months and one day after the date of issuance. The Company may pay finders' fees in connection of the placement of the loan. The loan is subject to regulatory approval.

The Company also announces that it is consolidating its operations in Canada and is in the process of closing its Littleton, Colorado office. Messrs. Tom Lantz (Chief Operating Officer), Richard Pershall (Senior Petroleum Engineer) and David Greene (Senior Petroleum Engineer) are no longer employed by the Company. The closing of the Littleton, CO office will not affect the Company's ownership of its U.S. petroleum and natural gas leases.

Gerald J. Shields, President

Issued and Outstanding: 193,576,106

Neither 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

  • Ryland Oil Corporation
    Mr. Jim Welykochy
    Vice-President Corporate Development
    Website: www.rylandoil.com