Bonterra Oil & Gas Ltd. Announces Expansion of Banking Facility, Provides an Operational Update and Enters into Agreement to Acquire Cobalt Energy Ltd.

    CALGARY, May 6 /CNW/ - Bonterra Oil & Gas Ltd. ("Bonterra" or "the
Company") ( (TSX: BNE) has entered into a new
syndicated banking facility effective April 29, 2009. The banking syndication
is led by the Canadian Imperial Bank of Commerce and includes the Royal Bank
of Canada and Alberta Treasury Branches. The maximum borrowing amount of the
new facility has been increased to $120 million from $100 million.
    The new banking facility consists of a $100 million syndicated revolving
credit facility and a $20 million non-syndicated revolving credit facility.
The terms of the new facility provides that the loan is revolving until April
28, 2011 and is subject to an annual review and has no fixed payment

    Operational Update:

    Bonterra is pleased to announce production results from a recently
drilled Cardium horizontal well in the Pembina area of west central Alberta.
Bonterra has a 25 percent working interest and is the operator of the
1-25-047-03 W5M ("1-25") well that produced at an average rate of
approximately 250 barrels of oil per day in February 2009, its first month of
production. The well is currently producing at approximately 145 barrels of
oil per day and 85 mcf per day of solution gas that is being conserved.
    Bonterra has a very large land position in the Pembina field with a
significant amount of undeveloped land with similar reservoir characteristics
to the 1-25 well with working interests ranging from 25 to 100 percent. The
Company will be drilling additional horizontal Cardium wells in Pembina to
further evaluate the play in 2009.

    Proposed Plan of Arrangement:

    Bonterra is also pleased to announce that it has entered into an
agreement through a proposed plan of arrangement to acquire all of the issued
and outstanding shares of Cobalt Energy Ltd. (Cobalt). Cobalt is a junior oil
and gas exploration and production company operating in western Canada with
production of approximately 85 barrels of oil equivalent per day. Cobalt's
main assets consist of a 43.18 percent working interest in the above discussed
1-25 well and additional lands with Cardium horizontal well potential in
Pembina with working interests ranging between 25 and 43.18 percent. These
lands are operated by Bonterra.
    Class A Cobalt shareholders will receive one Bonterra share per 71.05
Cobalt Class A shares while Class B Cobalt shareholders will receive one
Bonterra share per 11.84 Cobalt Class B shares. At closing it is estimated
that Cobalt will have negative working capital (that includes its bank loan)
of approximately $2,100,000.
    The board of directors of Cobalt has unanimously approved the proposed
transaction and, subject to receipt of an independent fairness opinion,
intends to recommend that the shareholders vote in favour of the proposed
transaction. Cobalt has agreed to pay a non-completion fee not to exceed
$400,000 to Bonterra under certain circumstances.
    Shareholders of Cobalt will be asked to approve the Plan of Arrangement
at a special meeting of shareholders expected to be scheduled in late June,
2009. The plan will, amongst other closing conditions, require the approval of
66 2/3 percent of the votes cast by the shareholders and the approval of the
Court of Queen's Bench of Alberta.
    The transaction may also be subject to TSX Venture Exchange and other
regulatory approvals.
    Bonterra will be releasing its 2009 first quarter results on or before
May 14, 2009.

    About Bonterra Oil & Gas Ltd.
    Bonterra Oil & Gas Ltd. is a conventional oil and gas corporation with
operations in Alberta, Saskatchewan and British Columbia. The shares are
listed on the Toronto Stock Exchange under the symbol "BNE".

    %SEDAR: 00003132E

For further information:

For further information: please visit or contact:
George F. Fink, CEO, Randy M. Jarock, President, Garth E. Schultz, Vice
President and CFO or Kirsten Kulyk, Manager, Investor Relations, Telephone:
(403) 262-5307, Fax: (403) 265-7488, Email:

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