Petrobank announces conversion incentive period for notes due 2012

By Jennifer Chiou

New York, June 15 - Petrobank Energy and Resources Ltd. said it has launched a conversion incentive period for holders of its $250 million of convertible notes due 2012.

Until 9:30 a.m. ET on June 16, holders who convert their notes will be entitled to receive:

• The number of common shares of Petrobank the holder is entitled to receive based on the existing conversion right, resulting in a maximum amount of 8,774,947 common shares being issued; and

• An additional incentive cash payment, subject to a maximum of $12,500 and a minimum of $7,500 per $100,000 principal amount of notes.

The notes will be converted based on the following formula per $100,000 principal amount of notes: $10,000 plus the product of (a) $34.67 minus the volume-weighted average price of the shares for the three days beginning on June 16 and (b) 3509.9789 per note times 1 minus the reference delta.

The reference delta is 85%.

Petrobank also announced that holders of $172.2 million, or about 69%, of the notes have already agreed to convert within the conversion incentive period.

The company added that the incentive payment will not impact the rights of holders of notes who do not wish to convert during the incentive period.

ABG Sundal Collier Norge ASA will manage the conversions during the incentive period.

The notes were issued under a loan agreement between Petrobank and Norsk Tillitsmann ASA dated May 2, 2007.

Based in Calgary, Alta., Petrobank is an oil and natural gas exploration company.

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