EQU: TSX, NYSE
March 9, 2011
/PRNewswire/ - As an update to its press release of
January 25, 2011
, relating to preliminary findings of fact and conclusions of law, Equal Energy Ltd. ("Equal" or "the Company") hereby announces that Judge
Christopher S. Sontchi
of the United States Bankruptcy Court for the District of
(the "Court") has issued an Order (the "Order") in furtherance of the Court's findings regarding the trial held before the Court from
December 15 to 17, 2010
involving certain agreements between the Company or certain of its subsidiaries and Petroflow Energy Ltd. or certain of its subsidiaries ("Petroflow"). The Order quantifies certain material financial obligations owed by Equal to Petroflow, which were provided for in the Court's earlier findings and conclusions. The extent and amount of Equal's claims against Petroflow must still be finalized in order to quantify its set-off rights and the net amount of the potential liability. The Company does not know when a full and final determination of its financial exposure to Petroflow will be made or whether such final determination will, in fact, have a material financial affect on the Company. Thus the Company has been advised that, at this time no payments are required to be made to Petroflow under the Order. The Company is working diligently with its legal counsel to determine what its legal rights are in terms of challenging the Order, including an appeal and with its auditors to determine the effect on the Company's financial statements.
, President and Chief Executive Officer of Equal said, "While the Court's rulings, if upheld, may point to exposure for the Company that is somewhat above our original expectation, we remain optimistic that once the matter is finally resolved the financial impact to Equal will not be material. Furthermore, the Order does not affect our drilling plans in the Hunton play and we still anticipate drilling 4 to 6 Hunton wells over the remainder of 2011."