Churchill Energy to sell Smoky Property for C$14.3 million, and become debt-free

Calgary: Churchill Energy Inc. has announced that it has decided in favour of selling its operated natural gas property in the Smoky area of Alberta, for $14.3 million Canadian dollars.

Churchill Energy Inc. announced the strategic sale as an update to its strategic alternatives review that were announced previously on 28 April, 2008. Calgary-based Churchill is a junior oil and natural gas company with operations in Alberta and Saskatchewan.

The transaction is expected to close within the next two weeks, and the sale will eliminate all of Churchill's debt, leaving the company with positive working capital of approximately $1.3 million.

Churchill is selling approximately 165 barrels of oil equivalent per day (boe/d), 693 million boe's of total proven reserves and 1,311 million boe's of total proved plus probable reserves based on GLJ's 31 December, 2007 reserve report.

Upon closing of the transaction Churchill will have approximately 325 boe/d of production and available credit facilities of $7 million. Tristone Capital Inc. is acting as Churchill's exclusive financial advisor in the strategic alternatives process.