/THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES./
CALGARY, Feb. 2 /CNW/ - Renegade Petroleum Ltd. ("Renegade" or the "Company") (TSX Venture: RPL) is pleased to announce that, together with Petro Uno Resources Ltd. ("Petro Uno") (TSX Venture: PUP) it has entered into a letter agreement (the "Agreement") to acquire a private Saskatchewan company ("PrivateCo") from its shareholders (the "Acquisition") for total consideration of $5.7 million. The Acquisition includes approximately 9.75 sections of land in the Dodsland area of West-Central Saskatchewan.
In addition, Renegade has entered into an agreement in principle to form a joint venture with Petro Uno whereby it will have the right to participate on a 50/50 basis in all farm-in agreements that Petro Uno has entered into to date and the right to participate in all future farm-ins that Petro Uno may negotiate in the Dodsland area of southwest Saskatchewan. The Acquisition and the joint venture are collectively referred to as the Transactions.
Further to the completion of the Transactions, Renegade will have access to over 16.50 gross (8.25 net) sections of land in the Dodsland area. With over 100 gross (50 net) identified drilling locations, the Transactions significantly increase Renegade's inventory of drilling locations and opens up a new core area in a defined resource play.
Under the terms of the Agreement, Renegade and Petro Uno will jointly acquire PrivateCo for cash consideration of approximately $4.5 million (Renegade's contribution) and 2 million Petro Uno common shares at a deemed value of $1.2 million. Petro Uno has agreed to "drill to equalize" on the first $3.3 million in drilling, completion and equipping costs associated on the Acquisition or farm-in lands. Renegade and Petro Uno will each acquire 50 percent working interests in the land holdings of PrivateCo. Closing of the Acquisition is expected to occur on or before March 15, 2010 and is subject to the execution of a formal purchase and sale agreement and regulatory approvals, including approval of the TSXV to the issuance of the Petro Uno common shares and to other conditions typical of transactions of this nature.
Renegade has agreed to participate, on a 50/50 basis, with Petro Uno in the development of the Viking Pool in the Dodsland area with the objective being to drill short horizontal multi stage fractured wells into the Viking zone. Petro Uno has entered into 8 farm-in agreements covering 6.75 sections in the area. Renegade will also have the option to participate in any further farm-in agreements that Petro Uno may negotiate on a 50/50 basis. The joint venture is not subject to any "promote" or other special compensation to Petro Uno.
The Transactions open up a new core area for Renegade and significantly increases Renegade's operational presence in Saskatchewan. With over 100 gross (50 net) identified drilling locations, the Transactions significantly increase Renegade's inventory of drilling locations.
Certain directors of Renegade also serve as directors of Petro Uno. The independent directors of Renegade have independently considered and unanimously approved both the Acquisition and the entry into the joint venture.
CLOSING OF MINORITY WORKING INTEREST PARTNER
Renegade is also pleased to announce that it has completed its acquisition of all of the issued and outstanding shares of a minority working interest partner in the Ceylon area, of south east Saskatchewan, as previously detailed in its press release dated January 8, 2010, for $1,800,000 cash and 150,000 common shares.
Renegade's Common Shares trade on the TSX Venture Exchange under the symbol RPL. Renegade currently has approximately 38.6 million fully diluted shares outstanding. Also, the Company's presentation can be viewed on its website at www.renegadepetroleum.com.
This press release contains forward-looking statements. More particularly, this press release contains statements concerning the anticipated dates for the closing of the transactions, the successful completion of the final joint venture terms, and the expected ability of Renegade to execute on its exploitation and exploration program.
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Renegade, including: (i) with respect to the anticipated closing dates of the transactions and negotiation of formal agreements, expectations and assumptions concerning receipt of required regulatory approvals and the satisfaction of other conditions to the completion of the transactions and (ii) with respect to the anticipated additional drilling opportunities to be made available to Renegade, expectations and assumptions concerning the success of future drilling and development activities, the performance of existing wells, the performance of new wells and prevailing commodity prices.
Although Renegade believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Renegade can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals or satisfy the conditions to closing the transactions, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking statements contained in this document are made as of the date hereof and Renegade undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Renegade Petroleum Ltd.
For further information: For further information: Renegade Petroleum Ltd., Michael Erickson, President & CEO, (403) 355-8922; or Renegade Petroleum Ltd., Alex Wylie, Vice-President, Finance & CFO, (403) 410-3376