Verenex provides update on communications from Libyan authorities

    CALGARY, June 22 /CNW/ - Verenex Energy Inc. ("Verenex") (VNX - TSX)
announces the status of its discussions with representatives of the Libyan
National Oil Corporation (the "NOC") and the General People's Committee (the
"GPC") of Libya in relation to obtaining NOC consent to a change of control of


    These discussions are the result of the acquisition agreement between
Verenex and CNPC International Ltd. ("CNPCI") dated February 24, 2009 (the
"CNPCI Agreement") under which CNPCI agreed to make an offer to purchase all
of the outstanding Verenex Shares, on a fully-diluted basis, at a price of
Cdn$10 per share. As previously disclosed, mailing of the offer is contingent
on the NOC providing written consent.
    NOC consent to a change of control of Verenex is required under the terms
of an Exploration and Production Sharing Agreement (the "EPSA") entered into
by a wholly-owned subsidiary of Verenex, its joint venture partner and the
NOC; however, under the terms of the EPSA, such consent cannot be unreasonably
    In discussions prior to the execution of the CNPCI Agreement, the NOC had
indicated to Verenex that an approval bonus would be required to be paid to
the NOC to obtain its consent to any sale transaction. Based on indications
from the NOC, Verenex estimated this amount to be approximately Cdn$46.7
million, and the CNPCI Agreement was negotiated on this basis. The NOC had
also indicated that, in consideration of the payment of such an approval
bonus, it would expedite its approval process so as to occur within a three to
four week period from the time its formal consent was requested.
    Since the execution of the CNPCI Agreement on February 24, 2009, Verenex
has actively sought the NOC's consent to the transaction. However, to date the
NOC has continually failed or refused to provide such consent. The Chairman of
the NOC has repeatedly stated publicly (most recently on May 22, 2009) that
the NOC intends to exercise a pre-emptive right to acquire Verenex on the same
terms and conditions as offered under the CNPCI Agreement. In a letter to
Verenex dated May 24, 2009, the Chairman of the NOC advised that the GPC was
still reviewing the exercise of a pre-emptive right by the NOC and that
Verenex would be informed by the NOC of the GPC's decision on the matter in
due course.
    On behalf of Verenex, the Government of Canada has expressed its concerns
to the Government of Libya respecting the actions, and lack of action, by the
    In light of the continuing efforts by Verenex to actively seek the NOC's
consent to the CNPCI offer, Verenex has sent a letter to CNPCI extending the
outside date under the CNPCI Agreement to August 24, 2009.

    Recent Developments

    On June 11, 2009, Verenex received a letter from the General Manager of
the NOC, the meaning of which was clarified by a subsequent letter on June 16,
2009 in response to strong concerns expressed by Verenex. Collectively, the
two letters advise that legal authorities in Libya are investigating
allegations that Verenex was improperly pre-qualified to bid in the EPSA IV
first bid round in January 2005, under which Verenex acquired its rights to
Area 47 in Libya. The letters further state that the ongoing investigation
does not affect the rights and obligations of Verenex, and likewise does not
affect the plans of the NOC related thereto, and the GPC has not provided its
final decision on the NOC's intention to exercise a pre-emptive right.
    Verenex considers these allegations to be without merit and vigorously
denies them. No specific improprieties or details of the allegations have been
provided to Verenex. The Company observes that the allegations are being made
more than four years after the award of exploration rights in Area 47 under a
transparent bid process and coincident with a request for consent for the sale
of the Company.
    Verenex is continuing to engage in discussions in good faith with both
the NOC and GPC to secure consent for the offer by CNPCI. In contrast to the
publicly stated position of the NOC, it is now clear that the GPC is seeking
either a reduced purchase price or an increased approval bonus. At the same
time, Verenex is considering and evaluating all of its options in light of
these recent events, including legal remedies available under the EPSA
contract such as arbitration.
    Investors are cautioned that there can be no assurance that consent to
the offer by CNPCI will be received soon from Libyan authorities, or that a
sale transaction will be concluded on the terms contemplated or at all.
    The Company is reassessing its operations and expenditures in light of
these continuing delays in completing a sale transaction. The Company
currently has sufficient cash reserves to fund anticipated programs over the
next few months.
    An annual and special meeting of the shareholders of Verenex has been
called. Verenex had expected the sale to CNPCI to be completed before a
meeting was required in 2009; however, with the delays experienced in
receiving the NOC's consent to the CNPCI offer, the Company is proceeding with
a meeting on August 10, 2009.
    This announcement coincides with the release on SEDAR of a material
change report which was previously filed on a confidential basis with
securities regulators.

    Forward-Looking Information and Statements

    This press release contains forward-looking statements respecting the
Company's cash reserves. These statements are based on current expectations
and are subject to a number of risks and uncertainties that could materially
affect the results. These risks include, but are not limited to: risks
associated with obtaining regulatory approvals; the uncertainty associated
with negotiating with governments; the risks and uncertainties associated with
Verenex seeking legal remedies available under the EPSA contract such as
arbitration, and the risks associated with international activity. Due to the
risks, uncertainties and assumptions inherent in forward-looking statements,
prospective investors in the Company's securities should not place undue
reliance on these forward-looking statements.

    %SEDAR: 00020996E

For further information:

For further information: Jim McFarland, President & CEO, Verenex Energy
Inc., Telephone: (403) 536-8009; or Ken Hillier, Chief Financial Officer,
Verenex Energy Inc., Telephone: (403) 536-8005;

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