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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: Rocket Red who wrote (47747)	8/21/2007 12:29:15 AM
From: Proud Deplorable	Read Replies (1) \| Respond to of 78421

Petrolifera provides information on its short term money market investments 08:15 EDT Monday, August 20, 2007 CALGARY, Aug. 20 /CNW/ - Petrolifera Petroleum Limited (PDP - TSX) hereby advises its shareholders and capital markets on the current status of the company's exposure to short-term asset-backed security investments in Canada. As at July 31, 2007 the company had approximately $37.7 million of its total $64.6 million in cash and cash equivalents invested in asset-backed securities. Petrolifera's cash management policy has been to invest in short-term investments ("Notes") that are rated R1-High by the Dominion Bond Rating Service ("DBRS"). This is the highest rating assigned to commercial paper by DBRS. Through the facilities of the money desk of its Canadian banker, the company had invested $20.0 million in Series A Notes issued by MMAI-I Trust and $17.7 million in Series A Notes issued by Apsley Trust, for a total maturing value of $37.7 million. As a result of recent disruptions in the global credit markets (and specifically the market for asset-backed security investments in Canada), on August 15, 2007 $20.0 million of Series A Notes issued by MMAI-I Trust and $11.4 million of Series A Notes issued by Apsley Trust became due and payable, but were not repaid and are currently outstanding. Petrolifera also holds $6.3 million of Series A Notes issued by Apsley Trust which are due and payable on August 31, 2007. Petrolifera has been monitoring and will continue to closely monitor Canadian short-term credit markets. The company has been repeatedly informed or advised that the situation which has developed is primarily related to liquidity concerns in respect of asset-backed securities, rather than the creditworthiness of the underlying assets owned by the aforementioned trusts. The company has been in discussions with its Canadian banker and representatives of the trusts and will continue to review and assess developments. On August 16, 2007 a group of financial institutions, led by the Caisse de dépôt et placement du Québec, announced that it had agreed in principle to a long-term proposal and an interim agreement regarding asset backed commercial paper, including the Notes issued by MMAI-I Trust and Apsley Trust. The effect of this, if agreed to by the parties and Note holders would, among other things, be to convert the Notes into term floating rate notes maturing no earlier than the scheduled termination dates of the underlying assets. There is no assurance as to the outcome of this proposal, or resulting liquidity should this proposal be accepted. There may be circumstances under which the company may be required to accept the outcome of such deliberations and proposal, even though it may not agree with the proposal. The remainder of Petrolifera's cash and cash equivalents of approximately $26.9 million are invested in term deposits in other jurisdictions or is held in cash operating accounts. These balances are not expected to be affected by the current situation in Canada. Petrolifera is unable to predict how long the current market disruption will continue. The company believes that it has sufficient cash balances and cash flow from operations, in addition to a previously-announced credit facility that is expected to be finalized in the coming weeks, to fund its planned operations during this period of market uncertainty. Based on the information available to it at this time, the company does not anticipate that the current situation will curtail any activities related to the execution of its 2007 operating and capital spending program. The company will continue to monitor these events and will update shareholders if and when appropriate. FORWARD LOOKING STATEMENTS This press release contains forward-looking statements, including statements relating to third party initiatives to support asset-backed securities, the anticipated impact to Petrolifera of the market disruption in such securities and the availability of alternative sources of funding for Petrolifera's operating and capital spending program. These statements are based on current expectations and available information that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses and health, safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the uncertainty associated with negotiating with foreign governments and risk associated with international activity. There can be no assurance that the long term proposal and interim agreement will be implemented or that such proposal will restore liquidity to the asset-backed securities market to facilitate repayment of the Notes held by Petrolifera. Further, there can be no assurance as to the timing for receipt of repayment of such Notes or the amount available to satisfy such obligations given the current status of the market and information regarding the underlying assets held by such trusts. Additional risks and uncertainties are described in the company's Annual Information Form which is filed on SEDAR at www.sedar.com. The company's ability to complete its capital program and potentially increase production volumes and reserves is dependent on access to services, drilling rigs and equipment and completion of the previously announced credit facility. Similarly, the company's ability to increase sales of oil and natural gas is dependent on sustained productivity of new and existing wells, maintenance (or reduction) of water cuts and completion of certain infrastructure and transportation systems that are currently under construction. There can be no assurance that the flow rates of newly drilled wells will result in stabilized production at these levels or that the company's new or existing high productivity wells will not incur higher water cuts than that reported or reductions in reservoir pressures, resulting in a decision to further curtail production pending implementation of the proposed pressure maintenance program or other remedial measures. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in the company's securities should not place undue reliance on these forward-looking statements. Forward-looking statements contained in this press release are made as of the date hereof and are subject to change. The company assumes no obligation to revise or update forward looking statements to reflect new circumstances, except as required by law. For further information: Richard A Gusella, Executive Chairman, Petrolifera Petroleum Limited Phone: (403) 538-6202 Fax: (403) 538-6225 inquiries@petrolifera.ca www.petrolifera.ca © Copyright Canada Newswire Report TOU Violation