Texalta Petroleum Ltd.

Texalta Petroleum Ltd.

November 16, 2010 12:22 ET

Texalta Announces Review of Strategic Alternatives & Shareholder Rights Plan

CALGARY, ALBERTA--(Marketwire - Nov. 16, 2010) - Texalta Petroleum Ltd. ("Texalta" or the "Company") (TSX VENTURE:TEX.A) announces that its Board of Directors has initiated a process to explore strategic alternatives for Texalta, with a view to enhancing shareholder value. Strategic alternatives may include, but are not limited to, sale of the Company, merger or other business combinations, a sale or farm-out of the Australian or Canadian assets, among other alternatives. The Company has formally engaged FirstEnergy Capital Corp. to provide financial advisory and investment banking services to assist it in this process.

The Board of Directors has determined that it was an appropriate time to assess strategic options following a thorough review of current operations, the exploration opportunities, contractual obligations and capital requirements to exploit the Company's lands in Australia and Canada.

Although Management and the Board of Directors are confident that there will be an acceptable and positive outcome arising from the review process, the current business environment remains challenging and there are no assurances that the process will result in any specific transactions being completed by the Company. There is no timetable for the review, and the Company does not intend to comment further regarding the evaluation of strategic alternatives unless the Board agrees to a definitive transaction or the process is concluded.

In addition, Texalta reports that its Board of Directors (the "Board") has implemented a Shareholder Rights Plan Agreement (the "Rights Plan") effective November 15, 2010.

The Rights Plan has been adopted to ensure the fair treatment of all Texalta shareholders in connection with any possible take-over bid for the outstanding common shares of the Company. If a take-over bid should occur the Rights Plan provides a mechanism to ensure that shareholders have adequate time to properly evaluate and assess a take-over bid without facing undue pressure. The Rights Plan also provides the Board with additional time to consider any take-over bid and, if applicable, to explore alternative transactions in order to maximize shareholder value. The Rights Plan is not designed to prevent take-over bids that treat the Company's shareholders fairly.

The Rights Plan is subject to approval of the TSX Venture Exchange and approval by the Company's shareholders at the Company's next annual general and special shareholders' meeting. If ratified by the shareholders, the Rights Plan will have a term of three years.

Pursuant to the terms of the Rights Plan, any bid that meets certain criteria intended to protect the interests of all shareholders is deemed to be a "Permitted Bid". A Permitted Bid must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, in addition to certain other conditions, must remain open for a minimum of sixty days. In the event a take-over bid does not meet the Permitted Bid requirements of the Rights Plan, the rights issued under the Rights Plan will entitle shareholders, other than any shareholder or shareholders involved in the take-over bid, to purchase additional common shares of Texalta at a significant discount to the market price of the common shares at that time. The Board is not currently aware of any pending or proposed take-over bid for Texalta.

Caution Regarding Forward Looking Information

This press release contains forward looking information within the meaning of applicable securities laws. Forward looking statements may include estimates, plans, expectations, forecasts, guidance or other statements that are not statements of fact. Forward looking information in this press release includes, but is not limited to, statements with respect to potential transactions and strategic options.

Forward-looking statements and information are based on current beliefs as well as assumptions made by; and information currently available to Texalta concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to: crude oil and natural gas price volatility, exchange rate and interest rate fluctuations, availability of services and supplies, market competition, uncertainties in the estimates of reserves, the timing of development expenditures, production levels and the timing of achieving such levels, the Company's ability to replace and increase oil and gas reserves, the sources and adequacy of funding for capital investments, future growth prospects and current and expected financial requirements of the Company, the cost of future abandonment and site restoration, the Company's ability to enter into or renew leases, the Company's ability to secure adequate product transportation, changes in environmental and other regulations and general economic conditions.

The forward-looking statements contained in this press release are made as of the date of this press release. This cautionary statement expressly qualifies the forward-looking statements contained in this press release.

TEX.A is a Calgary based company engaged in the exploration, acquisition and development of prospective oil & gas properties in Saskatchewan and Alberta, Canada. The company's wholly owned subsidiary, Texalta Australia Pty. Ltd. holds a 50 percent working interest in two exploration permits covering in excess of 5.5 million acres of prospective land in the Georgina Basin, Northern Territory, Australia.

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.

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