Dejour Further Strengthens Balance Sheet with 3 Strategic Transactions

Dejour announced three transactions that will position the Company to focus on its high growth development and exploration priorities. "We're aligning our strategy with our greatest opportunities for growth. To date in 2009, with the closing of these transactions, we have eliminated over $9M of debt," explained Mr. Robert L. Hodgkinson, Chairman & CEO. "These transactions will enable us more rapidly to realize the strength of our valuable oil and gas assets in Colorado, and British Columbia."

First, the Company has Letters of Intent in place with deposits to close the sale of a further $2.1M in minority property interests raising total property sales to C$6M. These divestitures coupled with the divesture to HEC, as described below, substantially deal with the Company's bank debt and position it for excess credit facility.

Second, Dejour has finalized an agreement with Brownstone Ventures Ltd. to convert a portion of its debt into equity units, accompanied with a one-year term debt note. Details of the transaction are:

  • US $2M debt into 6,666,667 shares (C$0.33) plus 3,333,333 warrants ($0.55/5 years)
  • US $1.78M converted to C$12% note due June 30, 2010 plus 2,000,000 warrants ($0.50/2 years, forced conversion at if share price trades through C$ 0.80 consecutively for 30 calendar days)
  • Subject to certain conditions precedent for the TSX

Third, independent members of Dejour’s Board of Directors have negotiated an agreement with Hodgkinson Equities Corporation (HEC) to deal with its debt obligation. Details are:

  • C$450k to be converted into a C$ 12% note due January 1, 2010, extendable to July 1, 2010 with a 6% bonus payable in share at the time.
  • C$450k debt to 1,500,000 shares (C$0.33) plus 750,000 warrants ($0.55/5 years)
  • C$900k converted into minority property interests, subject to certain approvals at a price equal to those interests sold for cash.
  • Transaction is subject to satisfaction of regulatory compliance.

Following these transactions, the Company turns its focus to its growth development and exploration priorities, which include:

  • Continued concentration on strategic acquisitions and joint ventures to lever the Company's existing US natural gas reserve/land base.
  • Commencement of drilling by Laramie II LLC, Joint Venture partner of the North Rangely Piceance Basin oil project in Q3.
  • High resolution 3D seismic and development drilling at the Woodrush oil project, Peace River Arch, NE British Columbia beginning in Q4.

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