Petrus Resources Ltd. announces major asset acquisition

CALGARY, Sept. 21, 2011 /CNW/ - Petrus Resources Ltd. ("Petrus" or the "Company") is pleased to announce that it has entered into a purchase and sale agreement to acquire oil and natural gas assets in the central Alberta foothills area. The acquisition is being made jointly with Manitok Energy Inc. ("Manitok") for total cash consideration of $85,000,000 before closing adjustments and related costs.  Each company will participate with an equal 50% interest in the acquisition, which includes gross production of approximately 2,600 barrels of oil equivalent per day ("boe/d"), weighted 94% to natural gas (1,300 boe/d net to Petrus). The acquisition has an effective date of July 1, 2011 and is expected to close on October 31, 2011, subject to customary conditions.  Petrus is able to finance its 50% interest using available cash and credit facilities.

Acquisition Highlights

The acquisition sets the stage for future growth, both organically and through additional acquisition opportunities. The acquisition includes the following (all figures provided below are net to Petrus):

  • Production of approximately 1,300 boe/d (94% natural gas)
  • Proved reserves of 4,998 Mboe and proved plus probable reserves of 6,810 Mboe, based on a GLJ Petroleum Consultants ("GLJ") report effective March 31, 2011; the reserve life index is 10.0 years on a proved basis and 13.5 years on a proved plus probable basis
  • Operating costs of approximately $9.00 per boe; average 2010 netback of $14.41
  • Net land of approximately 31,500 acres, half of which is undeveloped
  • 533 kilometres of proprietary 2D seismic data
  • An initial drilling inventory of more than 30 Cardium oil and gas locations, with additional opportunities targeting various Cretaceous reservoirs
  • Facilities include a 20% working interest in a sweet gas plant, a 50% working interest in three compressor and dehydration stations and varying ownership in field compressor sites and assorted gathering systems

A portion of the production in the asset package is subject to right of first refusal options ("ROFR") held by various third parties. If any ROFR is exercised, the corresponding amount of production and reserves acquired will be reduced, and the purchase price will be reduced by the value assigned to those assets.

In conjunction with the acquisition, Petrus and Manitok will enter into a joint operating agreement and establish an area of mutual interest. Petrus and Manitok are also in discussions regarding a farm out agreement of Manitok's upcoming drill program on a portion of its land in the foothills region.

Corporate Profile

Petrus is a private energy company formed in 2011 to capitalize on the current opportunity to aggregate natural gas assets at attractive prices. The Company raised seed capital in March and assembled a technical team comprised of individuals who formerly played key roles at Peyto Exploration & Development Corp. ("Peyto"), one of the most successful energy companies in Canada over the past decade.

Peyto co-founder Don Gray is Executive Chairman of Petrus. Dave Drover and Neil Korchinski, both of whom previously worked at Peyto, have been appointed VP Exploration and VP Engineering, respectively. Former Peyto controller Cheree Stephenson will hold the same position at Petrus. The individuals who previously had an association with Peyto had left to work at other companies before being recruited for the Petrus team. Kevin Adair, previously co-founder of Spry Energy Ltd. and former President of Petrobank Energy and Resources Ltd., has joined Petrus in the role of President.

Don Gray said: "I'm very pleased with the team we have assembled for Petrus. The enthusiasm, skills and experience of these individuals is exactly what we need to reach the level of excellence that I expect Petrus to operate at."

The Petrus Board of Directors is comprised of Don Gray, Kevin Adair and Peter Verburg, along with Rick Braund, Richard Lonquist and Patrick Arnell as independent directors. All of the directors of Petrus have been selected for their independence, their business savvy, their willingness to invest meaningful sums in the venture, and for the high ethical standards with which they have conducted themselves throughout their careers.


Forward-Looking Statements

Certain statements in this document are "forward-looking statements."  These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.  Forward-looking statements are not guarantees of future performance and Petrus cannot provide any assurance that these expectations will prove to be correct.  Any forward-looking statements are made as of the date hereof and Petrus does not undertake any obligation, except as required under applicable law, to publicly update or revise such statements to reflect new information, subsequent or otherwise.

This news release shall not constitute an offer to sell, or the solicitation of an offer to buy, securities in any province or territory of Canada or securities in the United States, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  Petrus securities will not be, and have not been, registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of that Act.

SOURCE Petrus Resources Ltd.

For further information:

Kevin Adair, P.Eng.
T: 403-815-3747

Profil de l'entreprise

Petrus Resources Ltd.

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