CALGARY, ALBERTA--(Marketwire - Sept. 10, 2009) - Eaglewood Energy Inc. ("Eaglewood" or the "Corporation") (TSX VENTURE:EWD) announces that further to its press release dated June 3, 2009, Eaglewood and Mega Fortune International Limited ("Mega") have entered into a variation agreement regarding the original farm-out agreement with respect to PPL259 (the "Variation Agreement"). The Variation Agreement addresses Mega's obligation to pay the total cash consideration of US $15,000,000 on a prescribed date. Under the terms of the Variation Agreement, Mega has agreed to pay the US $15,000,000 cash consideration by way of three non-refundable deposits on September 8 in the amount of US $1,500,000, September 30 in the amount of US $1,500,000 and October 30, 2009 in the amount of US $12,000,000. Eaglewood has received the first non-refundable deposit of US $1,500,000. In the event that Mega does not make all the non-refundable deposits on the specified dates, Eaglewood will retain 100 percent interest in PPL259 and any non-refundable deposits that were received.
Additionally, pursuant to the Variation Agreement, Mega has agreed to deposit US $20,000,000 into the joint account for the funding of the first exploration well on PPL259 by no later than December 31, 2009. In the event that Mega does not make this payment but has paid the non-refundable US $15,000,000 cash consideration, their overall interest in PPL259 will be reduced from 65 percent to 15 percent. Drilling is to commence no later than December 31, 2009.
Eaglewood's CEO Brad Hurtubise commented:
"We see the variations to the farm-out agreement as positive for both parties. Re-structuring the initial cash consideration as non-refundable deposits allows Mega time to close its financing and ensures that Eaglewood receives the funds on a timely basis. Eaglewood can continue to move ahead to meet its license commitments. Having a specified date for receipt of the drilling funds will provide better assurance of meeting the drilling schedule."
Certain statements contained in this press release may constitute forward-looking statements. These statements relate to future events or the Corporation's future performance. All statements, other than statements of historical fact, may be forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors as actual results may vary. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement. In particular, this press release contains forward-looking statements, pertaining to payments to be made by Mega and work plans to be conducted by the Corporation and Mega.
With respect to forward-looking statements above and contained in this press release, the Corporation has made assumptions regarding, among other things:
- the legislative and regulatory environment;
- the impact of increasing competition;
- unpredictable changes to the market prices for oil and natural gas;
- that costs related to development of the oil and gas properties will remain consistent with historical experiences;
- anticipated results of exploration activities; and
- ability to obtain additional financing if needed on satisfactory terms.
The Corporation's actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below:
- volatility in the market prices for oil and natural gas;
- uncertainties associated with estimating resources;
- geological, technical, drilling and processing problems;
- liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations;
- fluctuations in currency and interest rates;
- competition for, among other things, capital and skilled personnel; and
- unpredictable weather conditions.Neither the 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.