8 Mar 2007 07:00
Bankers Petroleum partners with Centillion for Palo Duro basin exploration program
Peninsula Assigns Previous Agreement with Bankers to Centillion
CALGARY, March 7 /CNW/ - Bankers Petroleum Ltd. is pleased to announce that it has entered into a purchase and sale agreement with Palo Duro Operating (U.S.), Inc., a wholly-owned subsidiary of Centillion Industries Inc. , for the sale of up to 27% of its approximate 375,000 net acres in the Palo Duro basin, Texas. Centillion has guaranteed the obligations of its subsidiary under the agreement. Peninsula Merchant Syndications Corp. assigned it rights under the previously announced letter of understanding with the Company to Centillion. The assignment was subject to Bankers consent which was granted upon execution of the agreement with Centillion.
Bankers will continue as operator of all programs on the Palo Duro lands.
The total consideration to be paid for the acreage is unchanged: US$19.5 million, of which a minimum of US$15.0 million will be in cash. Centillion is entitled to elect prior to closing to satisfy up to US$4.5 million of the purchase price through the issuance of securities of Centillion, having an ascribed maximum value of CDN$0.35 per security. Completion of the transaction is subject to certain conditions, including, but not limited to completion of a CDN$40 million equity financing by Centillion and approval of the TSX Venture Exchange. Subject to obtaining all necessary approvals, the transaction is expected to close in May 2007. Bankers is entitled to terminate the agreement and retain a non-refundable deposit if all conditions to closing have not been fulfilled on or before May 29, 2007.
Caution Regarding Forward-looking Information
Information in this news release respecting the proposed transaction with Centillion and planned work programs on the Company's US properties constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.
The transaction with Centillion is subject to certain conditions that may or may not be satisfied within the time frame anticipated or at all. If Centillion does not complete the acquisition for any reason, the Company's work programs for which the proceeds are intended to be used may have to be curtailed and funding sought from other sources. There is no assurance that such funding will be available to the Company on reasonable terms or at all and any financing could dilute the Company's interest in its properties or be dilutive to existing shareholders. Exploration for natural gas is a speculative business that involves a high degree of risk. Few wells that are drilled are ultimately developed commercially. Attainment of commercial production is dependent upon a number of factors and subject to risks including, but not limited to the ability to establish economic flow rates, ultimate hydrocarbon recoveries, future pipeline capacity, and availability of the necessary equipment, personnel and financial resources. There is no assurance that expenditures made by the Company on its US properties will result in discovery of commercial qualities of natural gas. Forward-looking statements and information are based on assumptions that financing, equipment and personnel will be available when required and on reasonable terms, none of which are assured and are subject to a number of other risks and uncertainties described under "Risk Factors" in the Company's Annual Information Form and Management's Discussion and Analyses, which are available on SEDAR under the Company's profile at www.sedar.com.
There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets. Bankers holds interests in four prospects in the Northern and Central regions of the United States, where it is currently pursuing the exploration of shale gas plays. It also operates in the Patos-Marinza oilfield in Albania pursuant to a license agreement, producing heavy oil. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the ticker symbol BNK.
For further information: Susan J. Soprovich, VP, Investor Relations and Corporate Governance, (403) 513-2681, Email: investorrelations(at)bankerspetroleum.com, Website: www.bankerspetroleum.com (BNK.)
BANKERS PETROLEUM LIMITED