Pearl Exploration and Production Ltd.



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  Mar 14, 2006 - 09:24 ET
Pan-Global Energy Ltd. Proceeding with Development Drilling While it Seeks to Resolve Land Dispute

  CALGARY, ALBERTA--(CCNMatthews - March 14, 2006) - Pan-Global Energy Ltd. (the "Company") (TSX VENTURE:PIE) announces that the company is proceeding with its Onion Lake development drilling program along a Dina heavy oil trend. The selection of development drilling locations for the program is being undertaken subject to approval of the previously announced Plan of Arrangement with Newmex Minerals Inc., which has recently changed its name to Pearl Exploration and Production Ltd. ("Pearl") (TSX VENTURE:PXX). Pan-Global has previously announced that it has entered into a formal agreement with Pearl which will see Pearl acquire all of the shares of Pan-Global. Pan-Global shareholders will receive one Pearl common share for each 6 Pan-Global common shares held. Shareholder and regulatory approvals are required for this transaction, which is expected to close in mid April, 2006. The shareholders of Pan-Global will be asked to approve the proposed Plan of Arrangement between Pearl Exploration and Production Ltd., formerly Newmex Minerals Inc., as outlined in the Information Circular which will be mailed shortly to shareholders for a meeting in mid- April. The circular outlines the terms of the arrangement in detail.

As a result of the expected shareholder approval of the Plan of Arrangement, the latest quarterly financials have been restated and re-filed on SEDAR as if the transaction was likely. In the opinion of management, the changes are not material and are outlined in the notes to the financial statements as well as the MD&A.

The Company is also now engaged in negotiations to resolve a land dispute at Onion Lake. Both the reserves assessed in Pan-Global's year end reserve report and the proposed locations for the Dina heavy oil drilling program locations do not need to be altered as they are on lands unaffected by this negotiation.

The Company entered into arrangements to exclusively explore and develop approximately 148,000 acres of existing and new Treaty Land Entitlement (TLE) Reserves in Eastern Alberta and Western Saskatchewan under the terms of a joint venture agreement with Onion Lake Energy Ltd. (OLE), which is owned by Onion Lake First Nation (OLFN) of Saskatchewan/Alberta. As previously announced, the Company completed a required second year earning commitment on these lands. Under the terms of the agreement, drilling of the wells were to have been completed prior to September 30, 2005, subject to regulatory approvals and surface access. Delays in the issuance of required surface access and unseasonably wet September weather delayed the drilling of the final wells until October. While the OLFN had acknowledged the need for the drilling delays, Indian Oil and Gas Canada (IOGC) has issued notice purporting to terminate the Company's right to earn further interests in the remaining unearned OLFN lands.

The Company has received notice from the OLFN that they intend to enter into agreements with new partners on those lands made available as a result of the purported termination of the initial OLE permit farmed out to the Company by the IOGC. The OLFN has also claimed that the purported termination is a breach of the Company's work commitments under its joint venture agreement with OLE, and that OLE therefore no longer has an obligation to repay the balance of a $3.0MM initial consideration payment made by the Company to OLE under this agreement. The Company does not agree with this interpretation and will continue to set-off royalties or will pursue Court proceedings to recover this entire amount.

The Company has asked for a Department of Indian Affairs and Northern Development Canada ministerial review of the IOGC decision. Additionally the Company will take steps to preserve its rights in respect of the unearned OLFN lands by proceeding with an application to the Federal Courts to grant injunctions that would prevent any new agreements from being struck with respect to exploration on those lands and reinstating the original OLE permit.

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks an uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION PLEASE CONTACT:


Pan-Global Energy Ltd.
Richard Naden
Interim President and COO
(403) 269-6911 ext 222
rnaden@pgenergy.ca

or

Pan-Global Energy Ltd.
Gordon Harris
Chairman and CEO
(403) 216-7694
gharris@choiceresources.ca

or

Pan-Global Energy Ltd.
10th Floor, 521 - 3rd Avenue S.W.
Calgary, Alberta T2P 3T3

or

Pearl Exploration and Production Ltd.
Gary Guidry
President and Chief Executive Officer
(403) 716-4051
(403) 261-1007 (FAX)
gary.guidry@tykoil.com

or

Pearl Exploration and Production Ltd.
Gary Hyde
Chief Operating Officer
(403) 716-4063
(403) 261-1007 (FAX)
gary.hyde@tykoil.com

or

Pearl Exploration and Production Ltd.
227, 200 Barclay Parade S.W.
Calgary, Alberta T2P 4R5
 
 

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