Transborder Capital Inc.

January 26, 2006 19:15 ET

Transborder Operations Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 26, 2006) - Transborder Capital Inc. (TSX VENTURE:TBI.P) ("Transborder" or the "Corporation") provides the following update:

Field Operations

Transborder is pleased to report that its current daily production levels are averaging 85 BOE/d, an increase of approximately 58 BOE/d since its "qualifying transaction" with Eagle Rock Exploration Ltd. ("Eagle Rock") was first announced on June 17, 2005. Eagle Rock, which became a wholly-owed subsidiary of Transborder in early January, 2006 upon the closing of the qualifying transaction, is party to a joint venture management agreement with an Alberta based private oil and gas company ("Privateco"), that provides Eagle Rock with the right to participate as to a 20% share in certain petroleum and natural gas asset acquisition opportunities generated by Privateco. Additional recent acquisitions by Privateco, principally in the Coutts area of Southern Alberta, and well work-overs, have contributed to the increased production to Eagle Rock.

Transborder also announces that (through its subsidiary, Eagle Rock) it has entered into separate letter agreements with 4 arm's-length vendors for the proposed acquisition of certain non-operated producing oil and gas interests, and the right to participate in additional drilling opportunities, all in SW Saskatchewan. It is anticipated that these acquisitions will provide an additional 16 BOE/d in oil and gas production (net to Eagle Rock), an aggregate of $120,000 in cash and the opportunity to drill up to 17 wells on 2 sections of land (1,280 acres), and the option to earn interests in an additional 5 sections (3,200 acres) of adjoining lands. The consideration for these proposed acquisitions, all of which will be subject to the approval of the TSXV, will be made by the issuance to each of the 4 vendors of 625,000 common shares of Transborder at a price of $0.40 per share, for an aggregate of 2,500,000 common shares. In addition to regulatory approval, these transactions are subject to final approval of the Board of Directors of Transborder. There will not be a change of control of the Corporation as a result of the proposed acquisitions.

Corporate Structure

Transborder further announces that, in order to stream-line operations and reduce costs, it is proposing to amalgamate with its subsidiary, Eagle Rock, subject to regulatory and TSX Venture Exchange approval. Upon completion of such transaction, the corporation formed upon the amalgamation will continue under the name "Eagle Rock Exploration Ltd." A new trading symbol, satisfactory to the TSXV, will be assigned at that time.

About the Corporation

The Corporation is a junior oil and gas company with a growth strategy based upon drilling and strategic acquisitions and alliances in Western Canada.

Forward-looking Information

This news release contains forward-looking information. Implicit in this information are assumptions, among other things, regarding oil and natural gas prices, production, royalties and expenses that, although considered reasonable by the Corporation at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Corporation's plans, changes in the commodity prices, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee by the Corporation that actual results achieved will be the same as those forecast herein. Readers are cautioned that the foregoing list of important factors is not exhaustive. The forward-looking statements contained in this news release are made as of the date hereof and the Corporation undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

Barrels of oil equivalent (BOE's) may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 Mcf:1 bbl has been used, which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Transborder Capital Inc.
    Jim Silye
    President and Chief Executive Officer
    (403) 269-4040
    (403) 261-1978 (FAX)