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Message: Sale of BCH to Allis-Chalmers
| December 29, 2008 |
| BrazAlta Resources Announce Sale of BCH to Allis-Chalmers |
| CALGARY, ALBERTA--(Marketwire - Dec. 29, 2008) - NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. NEWSWIRES BrazAlta Resources Corp. (TSX VENTURE:BRX) ("BrazAlta" or the "Corporation") is pleased to announce that it has entered into a definitive Share Purchase Agreement ("SPA") with Allis-Chalmers Energy Inc. ("Allis Chalmers") for the sale of all of BrazAlta's remaining interest in BCH Ltd. and its wholly owned subsidiary BCH Energy do Brasil Servicos de Petroleo Ltda. ("BCH Energy Services" or "BCH"), its Brazilian drilling subsidiary. The closing date of the transaction is expected to be December 31, 2008 and will result in Allis-Chalmers owning all of the outstanding capital stock of BCH. Under the terms of the SPA, Allis Chalmers will assume BrazAlta's US$23.5 million share of BCH's outstanding term debt facility with Standard Bank Plc., will assume its US$40 million convertible debenture into BCH, and will pay BrazAlta a cash consideration of US$5 million, for a total transaction value of US$68.5 million. BrazAlta intends to apply the US$5 million cash proceeds from the sale to partial settlement of its outstanding US$6.6 million mezzanine loan facility with Standard Bank Plc associated with the purchase of the Rancho Hermoso exploration and producing assets in Colombia. The proceeds from the sale of BCH, together with those from the recent sale of the oil hedge agreement with Standard Bank Plc announced on December 10, 2008, have been used to reduce the Corporations net total debt by US$73.5 million. Following this transaction, the Corporation will have a net outstanding debt of US$19 million. BrazAlta is a Canadian based international oil and gas corporation with operations in Colombia, Brazil, Guyana, Northern Ireland and Canada. BrazAlta is publicly traded on Toronto Venture Exchange (TSX VENTURE:BRX). Additional information may be found at www.brazalta.com and the Corporation's public filings may be found at www.sedar.com. |
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