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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Herb Duncan who wrote (10946)	5/28/1998 6:06:00 PM
From: SofaSpud	Respond to of 15196

FINANCING / Kyrgoil Debenture KYRGOIL CORPORATION DEBENTURE AMENDMENT CALGARY, May 28 /CNW/ - Kyrgoil Corporation announces that it has agreed with Petrofac Resources International Ltd. (''Petrofac'') to amend the terms of its July 1, 1997 $3.5 million convertible debenture issued in favour of Petrofac (the ''Debenture''). Under the original terms of the Debenture, Kyrgoil was required to pay to Petrofac $680,000 plus accrued interest on June 30 and December 31 each year, with the outstanding balance due and payable on June 30, 2000. The principal amount of the Debenture may be converted at Petrofac's option into ''units'' at a conversion price equal to $0.50 per unit. Each unit consists of one Kyrgoil common share and one Kyrgoil common share purchase warrant. Each such warrant will be exercisable into one Kyrgoil common share at the price of $0.50 per share up to 18 months from the date of issue. Petrofac had indicated to Kyrgoil that Petrofac would not exercise its option to convert the principal amounts due on June 30 and December 31, 1998 since Kyrgoil's common shares have recently been trading at approximately $0.25 per share. As a result, Kyrgoil has negotiated a restructuring of the June 30 and December 31, 1998 principal payments to allow Kyrgoil to retain internally generated funds to finance its Kyrgyz operations. Petrofac and Kyrgoil have agreed, subject to TSE approval, to a restructuring of the $680,000 June 30, 1998 and December 31, 1998 principal payments to be made by Kyrgoil to Petrofac as follows: 1 . Petrofac will convert its $680,000 principal repayments due on each of June 30, 1998 and December 31, 1998 into Kyrgoil common shares on the basis of one common share for each $0.25 of principal due on those dates ($0.25 being the closing price of Kyrgoil's common shares on the TSE prior to the agreement to amend the terms of the Debenture). The total number of shares to be issued to Petrofac respecting the two payments would therefore be 5,440,000. 2. Petrofac would waive its entitlement to receive warrants with respect to these two payments. The issuance of these additional shares will increase the number of outstanding Kyrgoil shares to 62,994,141. Kyrgoil Corporation is a Canadian-based public company. Its operations in the Kyrgyz Republic are conducted through Kyrgyz Petroleum Company, an integrated oil company formed and owned equally by Kyrgoil and Kyrgyzneftegaz. -30- For further information: Richard Kines, Chief Financial Officer, (403) 215-2400 or, Dale Styner, Corporate Secretary, (403) 215-2400, E-mail address: kyrgoil@cadvision.com, Website: www.kyrgoil.com