(TSX Symbol - PEF; NYSE Alternext Symbol - PED)
CALGARY, Feb. 6 /CNW/ - Petroflow Energy Ltd. is pleased to announce that
it has entered into a Letter Of Intent with a third party to acquire
additional producing oil and gas assets (the New Property) in Oklahoma. The
Company has completed an internal valuation of the New Property using recent
forecast pricing at a ten percent discounted present value of approximately
$US 46 million. Substantially all of the value is attributable to proved
developed producing reserves. Current production net to the vendor's working
interest is approximately 2000 Boe's per day.
The agreed upon purchase price is $US 40 million, which, at the option of
the vendor, may be paid entirely in cash or by a combination of $US 22 million
in cash and 5 million treasury shares.
"We are excited to have the opportunity to significantly increase our
production at a time when commodity prices are at a low point in the business
cycle. As the commodity prices improve, the New Property will prove to be an
even more valuable acquisition" stated Company CEO, John Melton.
"This transaction is accretive to our cash flow per share and should
significantly improve our bank loan ratios", added Company CFO, Duncan Moodie.
The New Property is located in the Company's core Hunton Resource Play.
The purchase of the New Property is subject to finalization of a mutually
acceptable purchase and sale agreement, due diligence on the part of Petroflow
and other standard qualifications. The Company's working interest partner has
rights under the Farmout Agreement to acquire the New Property. These rights
expire on March 5, 2009. The transaction is expected to close on or before
March 31, 2009.
This news release contains statements about the potential acquisition of
an oil & gas asset These statements may constitute "forward-looking
statements" or "forward-looking information" within the meaning of applicable
securities legislation as they involve the implied assessment that the
proposed acquisition of the oil & gas assets will be consummated and will be
accretive to the company's existing business.
Forward-looking statements are based on current expectations, estimates
and projections that involve a number of risks, uncertainties and other
factors that could cause actual results to differ materially from those
anticipated by Petroflow and described in the forward-looking statements.
These risks, uncertainties and other factors include, but are not limited to,
the ability to generate sufficient cash flow and/or access external debt to
fund the purchase of the oil & gas asset, adverse general economic conditions,
operating hazards, drilling risks, inherent uncertainties in interpreting
engineering and geologic data, competition, reduced availability of drilling
and other well services, fluctuations in oil and gas prices and prices for
drilling and other well services, government regulation and foreign political
risks, fluctuations in the exchange rate between Canadian and US dollars and
other currencies, as well as other risks commonly associated with the
exploration and development of oil and gas properties. Additional information
on these and other factors, which could affect Petroflow's operations or
financial results, are included in Petroflow's reports on file with Canadian
and United States securities regulatory authorities. We assume no obligation
to update forward-looking statements should circumstances or management's
estimates or opinions change unless otherwise required under securities law.
The TSX has not reviewed and does not accept responsibility
for the adequacy or accuracy of this news release.
For further information:
For further information: Petroflow Energy Ltd., John Melton, President &
CEO, (985) 796-5080; Duncan Moodie, CFO, (403) 539-4320,