Ryland Oil Closes Royalty Purchase and Receives Loan Approval
May 03 2010 - 8:00AM
Marketwired
Ryland Oil Corporation (TSX VENTURE: RYD) ("Ryland") is pleased to
announce that it has closed the purchase from Eternal Energy Corp.
("Eternal") of a 5% gross overriding royalty on production from all
petroleum and natural gas leasehold acreage held by Ryland's wholly
owned subsidiary, Pebble Petroleum Inc. ("Pebble"), in southeast
Saskatchewan. In consideration for the royalty, Ryland has issued
to Eternal 2,145,883 common shares of Ryland at a deemed price of
CDN $0.36, and has transferred to Eternal's Canadian subsidiary,
EERG Energy ULC, a 100% working interest in 4,480 acres of Crown
leases located in the Hardy area of southeast Saskatchewan. A cash
payment of US$2.9 million will also be made to Eternal by Ryland on
or before June 1, 2010.
The 2,145,883 Ryland shares issued to Eternal are subject to a
four month hold period expiring on August 30, 2010. Ryland's
royalty purchase from Eternal has been approved by the TSX Venture
Exchange ("TSX-V").
Ryland also announces that its wholly owned U.S. subsidiary,
Rover Resources Inc., has completed the purchase of Eternal's 10%
working in approximately 700 net acres of petroleum and natural gas
leases in northern North Dakota at a price of US$1 million. Rover
is the holder of the other 90% interest in and to those leases.
Ryland has also received TSX-V approval for a loan facility of
up to CDN$6.5 million. The loan has a one year term and bears
interest at a rate of 10% per annum, payable quarterly. Ryland will
issue up to 3,611,111 bonus shares at a deemed price of $0.36 per
share in consideration for the loan. The bonus shares will be
issued pro rata as funds are drawn down under the loan facility.
The bonus shares will be subject to four month hold periods from
the respective dates of their issuance. The Company has drawn down
US$1 million of the loan to fund the purchase of Rover's North
Dakota acreage referred to above. The loan facility will also be
used to fund the final payment of US $2.9 million due to Eternal on
June 1, 2010 on account of the royalty purchase. Ryland also
intends to use the loan facility to complete the purchase of
additional 4% in gross overriding royalties on production from
Pebble's acreage previously announced. Those acquisitions are
pending.
Gerald J. Shields, President
Issued and Outstanding: 200,473,418
Neither 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.
Contacts: Ryland Oil Corporation Mr. Jim Welykochy
Vice-President Corporate Development 403.861.1242
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