/NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERICA/
CALGARY, Oct. 15 /CNW/ - Velo Energy Inc. ("Velo" or the "Company") (TSX
VENTURE EXCHANGE: VLO) is pleased to provide an update on its activities.
The Business Plan for Velo that was described in a June 5, 2007 press
release had three objectives:
1. Tying in the Pica 13-06-84-05W6 Well.
2. Evaluate new exploration and development opportunities.
3. Analyze and develop a one year financial plan.
Management remains focused on implementing this Business Plan. In order
to accomplish its objectives, management must first complete a financial
restructuring of the Company's wholly owned subsidiary, Velo Energy Ltd.
("Velo Ltd."). Management is currently negotiating with the unsecured
creditors of Velo Ltd. for the purposes of arranging a repayment plan that
would see unsecured creditors agree to a reduction in the amounts owed to them
and to a timetable for the payment of such amounts. Subject to an agreement
with all of the unsecured creditors, the Company will advance $300,000 to Velo
In addition to the negotiation with unsecured creditors, management is
taking all possible steps to minimize Velo and Velo Ltd.'s overhead expenses.
As part of this initiative the offices and administration of the Company will
be relocated to Vancouver.
Nova Bancorp Loan
Subject to any required regulatory approvals or requirements, Nova
Bancorp Investments Ltd. ("Nova Bancorp") has agreed, subject to an agreement
with all of the unsecured creditors of Velo Ltd. being reached, to provide
Velo with a six month interest free loan in that amount of $300,000. Nova
Bancorp and its affiliates currently own 23.1% of the common shares of the
Company. The loan proceeds will be used by Velo for the advance to Velo Ltd.
Annual General Meeting
The financial plan developed by management may ultimately require
shareholder approval. To minimize the cost of obtaining such an approval, the
directors of the Company felt it was prudent to delay the date of the annual
general meeting ("AGM"). Velo filed an application with the Court of Queen's
Bench of Alberta and received an order that permits the AGM to be held no
later than December 17, 2007. Shareholders will be advised of the time and
location of the AGM in accordance with applicable regulatory laws and
About Velo Energy Inc.
Velo is an emerging oil and gas company engaged in the exploration for,
development and production of natural gas and oil in the western sedimentary
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this press release.
For further information:
For further information: Darrell Brown, Director, Tel: (403) 998-1068