CALGARY, ALBERTA--(Marketwire - Jan. 31, 2012) - Petrobank Energy and Resources Ltd. (TSX:PBG.TO - News) announces that we have entered into an agreement with Grizzly Oil Sands Ulc. to sell our May River property, which includes the Conklin demonstration project, for gross cash proceeds of $225 million subject to normal closing adjustments. Proceeds from this transaction will initially be used to repay outstanding bank debt and will result in Petrobank having a significant positive cash and working capital balance.
This sale allows us to focus our resources and expertise on our near and medium-term conventional heavy oil growth opportunities. Petrobank's 2012 focus is the commercialization of our Kerrobert THAI(R) project targeting increased production and reduced per-barrel operating costs. The May River disposition provides additional balance sheet flexibility to further evaluate our properties at Dawson, Plover and Luseland, as well as pursue additional opportunities.
The transaction is subject to satisfaction of certain customary conditions, including receipt of required regulatory approvals, and is expected to close by the end of February 2012. As part of this sale, the May River regulatory application is expected to be withdrawn.