True North Energy Corp.
OTC Bulletin Board : TNEN

True North Energy Corp.

April 05, 2007 15:27 ET

True North Energy Announces Proposed Acquisition of Oil and Gas Assets

HOUSTON, TEXAS--(CCNMatthews - April 5, 2007) - True North Energy Corporation (the "Company") (OTCBB:TNEN), an independent oil and gas exploration company, announced today that it has entered into a non-binding Letter of Intent to acquire certain assets in the Powder River Basin for total consideration of approximately $22 million (the "Purchase Price"). The assets proposed to be acquired include approximately 12,000 acres of land and are within a region that has seen significant oil and gas production. The assets consist of approximately 95 producing and injection wells already drilled and central oil processing facilities. A total of 17 wells are currently in operation with daily production of approximately 100 barrels of oil. The proposed acquisition also includes a purchase of a service rig.

Under the terms of the Letter of Intent, 50% of the Purchase Price will be payable in cash and 50% will be payable through the issuance of shares of the Company's restricted common stock. The number of shares of common stock issuable in connection with this transaction is intended to be computed by dividing $11,000,000 by the sum of the average closing trading price of the Company's common stock for the ten trading days immediately preceding the day on which a definitive purchase and sale agreement is executed plus $0.20 per share.

The targeted properties offer a Long Reserve Life Index of approximately 30 years proven-plus-probable reserves based on estimates by the sellers' third-party engineering firm. The Company believes that the properties offer significant drilling development project, near-term re-completion opportunities and future unrecognized enhanced recovery potential. The Company plans to initiate an exploitation program to drill proved undeveloped locations, reactivate wells and reduce operating costs as soon as the anticipated acquisition is concluded although no assurance can be given at this time that such acquisition will be completed.

John Folnovic, True North Energy Chief Executive, commented, "The acquisition of these assets is part of our strategy of acquiring assets we believe supplement our current portfolio and contribute a low-risk and high production profile. This acquisition is a "target-rich" opportunity where we can use our expertise and capital to further enhance the asset value and build another core area for the Company. We are continuing our efforts to locate and acquire new opportunities consistent with our goal to deliver shareholder value and growth-at-a-reasonable-price."

True North Energy anticipates that the acquisition of these assets will be concluded in May 2007.

Further Information

Shareholders and interested parties are encouraged to visit True North Energy's website: www.tnecorp.com and download True North Energy Corporation's Information Package. Please feel free to call shareholder relations toll-free on 1-888-567-0888 to receive a corporate information package. Alternatively, sign up at the website to receive news on the company as it becomes available.

About True North Energy Corporation

True North Energy Corporation is a publicly traded, independent oil and gas exploration company, with headquarters in Houston, Texas. True North Energy Corporation is focused on development of company's core asset in Alaska. The company is strategically located in the Cook Inlet and Beaufort Sea areas of Alaska and has commenced technical evaluation of its 34,850 acres of petroleum land holdings. True North Energy Corporation trades on the NASD OTC BB under the ticker symbol: TNEN.

John Folnovic, President and CEO

Forward-Looking Statements

Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management, including, but not limited to, the Company's belief that True North Energy Corporation can identify and successfully negotiate leases for oil and gas properties in Alaska, and that the Company can participate in the exploration of those properties. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. Additional information on risks and other factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission.

Contact Information