CALGARY, May 25 /PRNewswire-FirstCall/ -- Bankers Petroleum Ltd. (TSX: BNK, AIM: BNK) is pleased to announce that it has closed the sale of a 27% interest in its approximate 375,000 net acres in the Palo Duro basin, Texas, to Palo Duro Operating (U.S.), Inc., a wholly-owned subsidiary of Palo Duro Energy Inc. (Palo Duro Energy), formerly Centillion Industries Inc.
The total consideration paid for the acreage is US$19.5 million, of which US$15.0 million is in cash and the remainder in units of Centillion, comprising one share and one-half warrant. As a result, Bankers acquired 15,152,142 common shares and 7,576,071 common share purchase warrants of Palo Duro Energy. Each warrant entitles Bankers to acquire one additional common share at CDN$0.50 per share on or before May 25, 2009.
The shares represent 9.92% of the outstanding common shares of Palo Duro Energy. Under applicable securities legislation Bankers is also deemed to own and control the 7,576,071 common shares which may be acquired upon exercise of the warrants. Accordingly, Bankers is deemed to have acquired an additional 7,576,071 common shares of Palo Duro Energy, which, together with the shares, and assuming no exercise by any other holder of convertible securities of Palo Duro Energy, represents 14.18% of the outstanding common shares of Palo Duro Energy.
The cash received from the sale will be utilized to fund Bankers' 2007 U.S. capital program in the United States.
Caution Regarding Forward-looking Information
Information in this news release respecting planned work programs on the Company's US properties and anticipated natural gas production and timing thereof constitute forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, expectations, or beliefs as to future events or results and are believed to be reasonable based on information currently available to the Company.
Exploration for natural gas is a speculative business that involves a high degree of risk. Few wells that are drilled are ultimately developed commercially. Attainment of commercial production is dependent upon a number of factors and subject to risks including, but not limited to the ability to establish economic flow rates, ultimate hydrocarbon recoveries, future pipeline capacity, and availability of the necessary equipment, personnel and financial resources. There is no assurance that expenditures made by the Company on its US properties will result in discovery of commercial qualities of natural gas. Forward-looking statements and information are based on assumptions that financing, equipment and personnel will be available when required and on reasonable terms, none of which are assured and are subject to a number of other risks and uncertainties described under "Risk Factors" in the Company's Annual Information Form and Management's Discussion and Analyses, which are available on SEDAR under the Company's profile at http://www.sedar.com/.
There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.
About Bankers Petroleum Ltd.
Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets. Bankers holds interests in four prospects in the Northern and Central regions of the United States, where it is currently pursuing the exploration of shale gas plays. It also operates in the Patos-Marinza oilfield in Albania pursuant to a license agreement, producing heavy oil. Bankers' shares are traded on the Toronto Stock Exchange and the AIM Market in London, England under the ticker symbol BNK.
