Board of Directors Issues a No Action Determination as to its Plan Class 5B Holders.
In accordance with the Joint Chapter 11 Plan of Reorganization (the "Plan"), the Board of Directors of Petroflow Energy Corporation ("Petroflow" or the "Company") met on March 28, 2012 to determine whether to issue a distribution of shares or the cash equivalent to all Plan Class 5B Holders who had held more than one thousand shares of Petroflow Energy Ltd. stock, as of September 30, 2011 or to take no action as set forth in the Plan.
The Board determined that a decision in favor of making either of the potential distributions at this time would be detrimental to long-term value of the Company. First, the issuance of Petroflow stock to the rights holders would result in an increase in the number of shareholders and thereby require Petroflow to become a financial reporting entity in the United States and Canada. The significant costs associated with becoming a financial reporting entity would reallocate Petroflow's limited cash resources to non-value creating activities instead of drilling and development of oil and gas wells. For similar reasons, the Board determined that making a cash distribution would be premature and again would reallocate capital away from value creation which is in the long-term interests of the Company and the Class 5 Holders.
Accordingly, the Company has decided to take no action as to its Class 5B Holders at this time. "Taking no action allows the Company to maintain its focus and efforts through its drilling and development operations in Oklahoma," said Petroflow's President & CEO, Richard Menchaca. Additional information is available by accessing Petroflow's website at http://www.Petroflowenergy.com.
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Petroflow Energy Corporation | 15 West 6th Street, Suite 1100 | Tulsa, OK 74119 | 918-592-1010