Serrano Energy Ltd.

April 29, 2008 19:19 ET

Serrano Energy Ltd. Announces Transaction With Canadian Phoenix Resources Corp., Filing of Its 2007 Year End Results and Change in Directors.

CALGARY, ALBERTA--(Marketwire - April 29, 2008) - Serrano Energy Ltd -

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Transaction with Canadian Phoenix Resources Corp.

Serrano Energy Ltd. ("Serrano") announces that it has executed the following agreements with Canadian Phoenix Resources Corp. ("Canadian Phoenix"):

(a) an asset sale agreement pursuant to which Canadian Phoenix has agreed to sell its Freemont property to Serrano for 7 million common shares ("Serrano Shares") of Serrano issued at the deemed price of $5 per Serrano Share, representing a transaction value of $35 million, subject to adjustment (the "Freemont Transaction"); and

(b) a subscription agreement pursuant to which Canadian Phoenix has agreed to purchase 2 million Serrano Shares at the price of $5 per share representing a total subscription amount of $10 million (the "Subscription Transaction").

A condition for the completion of each of the Freemont Transaction and the Subscription Transaction is the grant by Canadian Phoenix to Serrano of an option buy-back on selected farm-ins, and earned working interests on certain of Serrano's oil and gas properties by way of incurring specific CEE expenditures (the "Farm-in Transaction"). As consideration for such option, Serrano is to issue 2 million Serrano Shares, valued at a total of $10 million, to Canadian Phoenix.

The completion of the Freemont Transaction, the Subscription Transaction and the Farm-in Transaction (collectively, the "Canadian Phoenix Transaction") will result in Canadian Phoenix holding a 50.1% controlling ownership interest in Serrano. Subject to the conditions of the underlying agreements, it is presently anticipated that the Canadian Phoenix Transaction will be completed in June 2008. Please refer to Canadian Phoenix's news releases dated February 4, 2008 and March 14, 2008 for additional information.

The Canadian Phoenix Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance and, if required pursuant to TSX Venture Exchange, Canadian Phoenix shareholder approval. It is anticipated that Canadian Phoenix will prepare an Information Circular or a Filing Statement in accordance with the form prescribed by the TSX Venture Exchange in respect of the proposed transaction. Where applicable, the transaction cannot close until the required Canadian Phoenix shareholder approval is obtained. There can be no assurance that this transaction will be completed as proposed or at all.

2007 Year End Results

Serrano announces the release of its financial results for the year ended December 31, 2007. For further information, please see the financial results and Management Discussion and Analysis of Serrano, all of which is available on SEDAR at www.sedar.com.

Serrano has also filed an Annual Information Form for the year ended December 31, 2007, which includes the following reports required under National Instrument 51-101 "Standard Disclosure for Oil and Gas Activities": Form 51-101F1, Statement of Reserves Data and Other Oil and Gas Information; Form 51-101F2, Reports of Reserve Data by Independent Qualified Reserves Evaluators; and Form 51-101F3, Report of Management and Directors on Oil and Gas Disclosure. The Annual Information Form is also available on SEDAR at www.sedar.com.

Change in Directors

Serrano announces the appointment of Keith C. Hill as a director of Serrano, effective March 11, 2008. Mr. Hill has over 20 years of experience in the oil industry including senior management positions and international new venture and exploration management at Lundin Oil AB, Occidental Petroleum Corporation and Shell Oil Company. Mr. Hill is currently President, Chief Executive Officer and a director of Pearl Exploration and Production Ltd.

Serrano also announces the resignation of George Lepine as a director of Serrano effective March 11, 2008.

Serrano Energy Ltd. is an Alberta-based company formed to participate in heavy oil and natural gas exploration, development and acquisitions in Alberta and Saskatchewan. The Company's shares are not currently listed for trading on any stock exchange. The Company currently has 10,941,291 common shares outstanding.

FORWARD-LOOKING STATEMENTS Certain information set forth in this document, including management's assessment of Serrano's future plans and operations, contain forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond these parties' control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Serrano's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Serrano will derive therefrom. Serrano disclaims any intention or obligation to update or review any forward-looking statements, whether as a result of new information, future events or otherwise.

Note: Boe means barrel of oil equivalent on the basis of 1 boe to 6,000 cubic feet of natural gas. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas is based on an energy equivalency conversion primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Contact Information

  • Serrano Energy Ltd.
    J.W. Grant Robertson
    Vice-President Business Development
    (403) 231-1230