Richards Oil and Gas Limited announces receipt of notice of event of default and provides update on corporate matters

    CALGARY, June 26 /CNW/ - Richards Oil & Gas Limited (the "Company"), (TSX
Venture: RIX) announces that on June 25, 2009, it has received a notice of
event of default letter from the National Bank of Canada notifying the Company
that it is in default under its loan agreement for failure to comply with
certain covenants under the current loan agreement the Company has with the
National Bank of Canada. As a result of the default, the National Bank of
Canada has demanded the total amount due and owing under the loan agreement
($3,315,000) be repaid immediately. The Company is currently in negotiations
with the National Bank of Canada introducing alternatives to meet their

    Corporate Matters

    Earlier in 2009, and as previously reported by the Company, the
combination of production challenges experienced on start-up at the Company's
Thorsby property and the considerable decline in natural gas prices resulted
in the Company not achieving positive cashflow from its operating activities
and therefore relying solely on its credit facility for liquidity. In
recognition of this concern, the Company initiated a process seeking strategic
alternatives to continue operations.
    To assist with this initiative and in its discussions with the National
Bank of Canada, the Company engaged Mr. Michael Steele of Avonlea Ventures
Inc. Mr. Steele will assist in seeking a sale of the assets of the Company, a
sale or merger of the Company or a financial restructuring of the Company
including raising new equity. Mr. Steele has considerable experience in the
corporate finance and has been involved in several recent restructurings in
the Canadian junior oil and gas industry. No decision on any particular
alternative has been reached at this time and there can be no assurance that
the process will result in any change in the Company's current condition, that
the Company will pursue any particular transaction or that any transaction
will be concluded.

    Convertible Debentures

    Earlier in the month the Company gave notice to its Convertible Debenture
Holders that in connection with its unsecured subordinated convertible
debenture maturing June 26, 2011 (the "Debenture"), the Company intends to
exercise its option, subject to regulatory approval, to pay the total accrued
but unpaid interest due on June 30, 2009, namely $257,863, in common shares in
the capital of the Company. Pursuant to the Debenture Agreement the per share
value of the common shares issued to pay the total accrued but unpaid interest
due on June 30, 2009 will be $0.05.
    The Company also is holding a meeting of the Convertible Debenture
Holders at 3:30 pm (Calgary time) on June 30, 2009. The dial-in details for
this meeting are available by calling the Company directly at 403 265 8444.
    There are currently 72,661,602 common shares of the Company issued and

    Statements in this news release contain forward-looking information
including expectations of future production, procurement of drilling permits,
plans for and results of exploration and development activities and other
operational developments. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, as a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company. These
risks include, but are not limited to; the risks associated with the oil and
gas industry, commodity prices, and exchange rate changes. Industry related
risks include, but are not limited to; operational risks in exploration,
development and production, availability of skilled personnel and services,
failure to obtain industry partner, regulatory and other third party consents
and approvals, delays or changes in plans, risks associated with the
uncertainty of reserve estimates, health and safety risks and the uncertainty
of estimates and projections of reserves, production, costs and expenses. The
reader is cautioned not to place undue reliance on this forward-looking
information. The forward-looking statements contained herein are subject to
change. Except as required by applicable securities laws, the Company assumes
no obligation to update or revise any forward-looking statements should
circumstances or management's opinions or estimates change.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this news release.
    %SEDAR: 00021365E

For further information:

For further information: Brad Turner, President & CEO, Richards Oil &
Gas Limited, Tel: (403) 265-8444, E-Mail:; Lonn
Bate, CFO, Richards Oil & Gas Limited, Tel: (403) 265-8444, E-Mail:; Corporate website address:

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