Petroflow Energy Ltd. Closes Global Settlement Transaction

TULSA, Okla., June 3, 2011 /PRNewswire/ -- Petroflow Energy Ltd. and its subsidiaries, North American Petroleum Corporation USA and Prize Petroleum LLC (collectively, "Petroflow") announces the closing of its settlement with its secured lenders and its former partner, Equal Energy Ltd. and Equal's subsidiaries (collectively, "Equal") (the "Settlement Agreement").  Under the Settlement Agreement and its associated purchase and sale agreement, Petroflow sold its Hunton assets in Oklahoma to Equal and settled all outstanding legal matters and other claims among Petroflow, Equal, and Petroflow's secured lenders.  As part of the settlement Petroflow retains approximately fifty percent of the up hole rights in the leases held by the Hunton assets as well as operatorship of those assets.   The up hole zones retained by Petroflow consist of light oil opportunities including the Mississippi, Redfork and Oswego formations.  Petroflow currently expects to commence its development program in the early fall of 2011.

"The Settlement is a major step for the company and its stakeholders towards its emergence from bankruptcy as it fully satisfied the company's bank debt and resolved any and all alleged claims by Equal while maintaining significant upside reserves in the existing leasehold.  The settlement helps us unlock the company's value and enables the company to continue towards completion of the next phase of its chapter 11 reorganization," said Petroflow CEO, Richard Menchaca.

Judge Christopher S. Sontchi's order approving the Settlement can be found at http://dm.epiq11.com/napcus.

SOURCE Petroflow Energy Ltd.