Cantrell announces proposed acquisition of Colombian oil and gas assets

    
    /NOT FOR DISTRIBUTION TO UNITED STATES WIRE SERVICES OR DISSEMINATION IN
    THE UNITED STATES/

    TSXV - CLJ.H
    

VANCOUVER , Sept. 16 /CNW/ - Cantrell Capital Corp. ("Cantrell") has entered into an agreement dated September 2, 2009 with Peninsula Corp, a British Columbia company based in Vancouver , BC, Next Ventures Corp. of Bogota , Colombia , and Knotsville Capital S.A. of Zurich (collectively the "Vendors") for the acquisition (the "Acquisition") of all of the outstanding shares of Imore S.A. ("Imore"), a Panamanian company. Imore has the right to acquire certain hydrocarbon exploration and production contracts in Colombia (the "EP Contracts") through an underlying agreement dated August 20, 2009 , as amended, with Green Power Corporation S.A., ("Green Power") of Bogota , Colombia , the current holder of the EP Contracts. In consideration for the shares of Imore, Cantrell will issue an aggregate of 60 million of its common shares to the Vendors, in equal proportions. The transaction will constitute a reverse takeover under applicable policies of the TSX Venture Exchange (the "Exchange").

In order to acquire an initial 50% working interest in the EP Contracts, Imore was required to pay US $1 million to Green Power and US $8.5 million to support guarantees to be placed pursuant to the terms of the EP Contracts, both of which payments were made September 10, 2009 . A further US $8.5 million is due to support further guarantees within 17 months. Imore is also required to fund an exploration budget estimated at US $43 million over a 36 month period, which includes the previously mentioned guarantees aggregating US $17 million . Approximately US $6.5 million of the exploration budget (not including the guarantees) is required to be funded by October 15, 2009 . Imore has the option to acquire the 50% balance of the EP Contracts for payment of US $50 million payable on the earlier of 18 months from the agreement date, and completion of seismic interpretation on the acquired properties. As consideration for the option, Imore is required to pay Green Power US $3 million , payable in shares of Cantrell at C$0.25 per share (approximately 13.2 million shares). This obligation is being assumed by Cantrell.

Cantrell provided a bridge loan to Imore to fund the US $9.5 million which was paid September 10, 2009 . Endeavour Financial ("Endeavour") lent such funds to Cantrell in order to provide the bridge loan. The loan from Endeavour is repayable within one year and bears interest at 10%. As consideration for the loan, Endeavour will receive 10 million common share purchase warrants of Cantrell exercisable at $0.50 per share for a period of one year.

In addition to the acquisition of Imore, Cantrell has entered into an agreement dated September 10, 2009 with European Energy Partners Trust to acquire all of the issued shares of Free Traders Inc., a Panamanian company which holds a 5% carried Participating Interest in a Technical Evaluation Agreement respecting the Arauca Block (the "Arauca Block") in Colombia , and in any Exploration and Production Contracts resulting therefrom, including an Exploration and Production Contract which was entered into between Pacific Colombia and the Colombian Agencia Nacional de Hidrocarburos on June 30, 2009 . Consideration for the acquisition of Free Traders Inc. consists of US $5 million , payable upon receipt of regulatory approval for Cantrell's reverse takeover described above.

In conjunction with the Acquisition, Cantrell will complete a private placement of 100 million subscription receipts at a price of $0.25 per subscription receipt for gross proceeds of $25,000,000 . The financing is being led by GMP Securities L.P. and Canaccord Capital Corporation and also includes Raymond James Ltd. Upon closing of the subscription receipt financing, the funds will be placed into escrow until closing of the Acquisition at which time the subscription receipts will convert into units of Cantrell. Each unit will consist of one common share and one common share purchase warrant exercisable at $0.75 per share for a period of five years. The proceeds from the financing will be used to repay the loan from Endeavour, to fund the intitial exploration programs on the EP Contracts, for the acquisition of the 5% interest in the Arauca Block, as well as for general working capital.

Completion of the financing is subject to certain conditions including, but not limited to, satisfactory due diligence, the execution of a definitive agency agreement and the receipt of all necessary shareholder, regulatory and stock exchange approvals. The subscription receipts and the securities underlying the subscription receipts will be subject to a four month hold period from the closing date of the private placement.

In connection with the Acquisition, the Company will change its name to Petroamerica Oil Corp.

    
    Imore Properties
    ----------------

    The properties to be acquired by the Company through the acquisition of
Imore, currently held by Petrolera Monterrico, S.A., OPA, S.A. and Cenercol,
S.A., consist of various working interests in four exploratory blocks as
follows:

                                     Working
    Block Name   Location           Interests   Area, hectares   Operator*
    ----------   --------           ---------   --------------   -----------
    COR 12      Oriental Cordillera    89%          76,807       Green Power
                  Basin
    COR 14      Oriental Cordillera    50%          34,502       OPA S.A.(xx)
                  Basin
    LLA 10      Llanos Basin           89%          76,702       Green Power
    VMM 3       Middle Magdalena      100%          33,714       Green Power
                  Basin

    *  ...Pursuant to private agreements.
    (xx) OPA S.A. is a Green Power affiliate.
    

All the exploration contracts are with Agencia Nacional de Hidrocarburos (ANH) of Colombia and are subject to their sliding scale royalties. In the VMM 3 Block, there is an additional 3% overriding royalty payable to Cenercol S.A.

COR 12 - Within the block, two wells (Altamizal No.1 and No.1A) were drilled and the Andalucia field is located to the southwest. The exploration contract was signed on March 13, 2009 . The minimum commitment in the first phase (three years) is to acquire 160 km of 2-D seismic and drill one well. The second phase commitment is to drill two wells in three years. The exploration objectives are the Monserrate/La Tabla in the Honda Group in the Tertiary and the Caballos formation in the Cretaceous.

COR 14 - Within the block, a total of 14 wells have been drilled. The surrounding fields are Andalucia to the northwest, La Jagua, Palogrande, Cebu, Piajo, and Rio Ceibas to the southwest, and Hato, Nuevo, Brisas, Loma Larga, Tenay and Dina K to the west. The exploration contract was signed on March 13, 2009 . The minimum commitment in the first phase (three years) is to acquire 69 km of 2-D seismic and drill one well. The second phase commitment is to drill two wells in three years. The exploration objectives are the Monserrate/La Tabla in the Honda Group in the Tertiary and the Caballos formation in the Cretaceous.

LLA 10 - Three exploratory wells (Casanare No.1, No.1A and Santa Maria No.1) have been drilled in this block and the Capachos field is located northwest of the block. The exploration contract was signed on March 13, 2009 . The minimum commitment in the first phase (three years) is to acquire 60 km of 2-D seismic and drill one well. The second phase commitment is to drill two wells in three years. The exploration objectives are the Carbonera series of sandstones, Mirador and Barco formations in the Tertiary and Guadalupe and Une formations in the Upper Cretaceous.

VMM 3 - The block is surrounded by production. To the northwest, the Barranca-Lebrija Block has the Lebrija field. To the northeast, the Tisquirama Block has the San Roque field. To the southeast, the Tisquirama A-B Block has the Santa Lucia field. The exploration contract was signed on June 2, 2009 . The minimum commitment in the first phase (three years) is to acquire 70 km of 2-D seismic and drill one well. The second phase commitment is to drill two wells in three years. The exploration objectives are Esmeralda and La Paz formations in the Paleocene.

    
    Arauca Block
    ------------
    

The Arauca Block is located in the Arauca Department, Llanos Basin, Colombia , east of the Cano Limon field, south of the Colombian-Venezuela borders and 60 km from the oil-delivery point to the pipeline Cano Limon-Covenas.

The Arauca Exploration & Production (E&P) contract with the Agencia Nacional de Hidrocarburos (ANH) was executed on June 30, 2009 by Pacific StratusEnergy Colombia Corp, a 100% subsidiary of Pacific Rubiales Energy Corp.

This contract contemplates a 24-month first exploratory phase with work commitments of two exploratory wells at an estimated total cost of US $9,000,000 . The contract incorporates an area of 173,584 hectares containing 16 prospects and leads that have been identified based on the reprocessing of 2,000 kms of 2-D seismic.

    
    Principals of the Company
    -------------------------
    

Concurrently with closing of the Acquisition, the Board of Directors of Cantrell will be reconstituted to consist of up to 7 members, which will include:

Jeffrey S. Boyce, Director

Mr. Boyce is a Calgary based, senior oil and gas executive with over 29 years of domestic and international experience in building, financing and managing public oil and gas companies. He is the current Chairman, President, CEO and Director of Sure Energy Inc., former President & CEO and Co-Founder of Clear Energy Inc., Vermilion Resources Ltd. (Vermilion is a $3 billion international energy trust) and Aventura Energy Inc. Mr. Boyce currently sits on the Board of Directors of three public companies and four private corporations.

Augusto Lopez, Director

Mr. Lopez has worked for over 40 years in various capacities, most recently as President at Bavaria, S.A. which is Colombia's largest beverage maker, and as a Director of Pacific Rubiales Energy Corp. He has also held senior positions with Bavaria's investment company and Avianca, S.A. Mr. Lopez is an electrical engineer and serves on the boards of numerous public and private South American companies.

John Zaozirny, Director

Mr Zaozirny has served as Vice Chair and a Director of Canaccord Capital Corporation since 1986, and was Counsel to the law firm of McCarthy Tetrault LLP from 1986 to 2008. He is Chairman of Provident Energy Trust, and Vice Chair and Lead Independent Director of Pengrowth Energy Corporation and serves as a Director of a number of other public and private companies. He is also a Governor of the Business Council of British Columbia. Mr. Zaozirny was Minister of Energy and Natural Resources for the Province of Alberta from 1982 to 1986.

Michael E. Beckett, Director

Mr. Beckett is the Chairman of Endeavour Financial, and is also the Chairman of the Thomas Cook Group and serves as Non-Executive Director of Egypt Trust Limited, Northam Platinum Ltd ( South Africa ), Orica Ltd ( Australia ), and Mvelaphanda Resources Limited ( South Africa ). Mr. Beckett was previously Chairman of MyTravel. Before joining MyTravel he was Chairman of London Clubs International plc and WBB Minerals Ltd; Managing Director of Consolidated Gold Fields plc, Ultramar P.L.C., Oxus Gold plc, Ashanti Goldfields Company Limited and Clarkson plc; and a non-executive director of BPB plc and Foreign and Colonial General Income Growth plc.

    
    Share Capital
    -------------
    

Cantrell currently has 59,244,294 shares issued and outstanding (63,744,294 fully diluted). On completion of the above transactions it will have approximately 232,444,294 shares issued (365,944,294 fully diluted), of which 25% (17% fully diluted) will be held by existing Cantrell shareholders.

On closing of the Acquisition, the Company will grant options to purchase up to 19,000,000 common shares to directors, officers, consultants and charities at an exercise price of $0.25 per share.

    
    Conditions Precedent to Completing the Acquisitions
    ---------------------------------------------------
    

The parties' obligations to complete the Acquisition are subject to the satisfaction of a number of conditions, including but not limited to Exchange approval. The Company's obligation to complete the Imore acquisition is also subject to receipt of an acceptable independent engineering report regarding the assets to be acquired. The Company has retained Petrotech Engineering Ltd. for preparation of the report.

Closing of the aforementioned transactions is expected to occur on or before October 31, 2009 and is subject to shareholder and regulatory approval as well as receipt of acceptable reports from independent engineers.

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information circular and/or Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States . The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

For further information: Gordon Keep, Corporate Secretary & Chief Financial Officer, Tel: [phone]