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NEWS RELEASE
BONTAN CORPORATION INC.
47 Avenue Rd. Ste 200
Toronto, ON M5R 2G3
NEWS
RELEASE
BONTAN
CORPORATION RAISES US$7.5 MILLION THROUGH PRIVATE PLACEMENT. PROVIDES CORPORATE
UPDATE ON ITS ISRAELI OFFSHORE NATURAL GAS EXPLORATION PROJECT
Toronto, Ontario, May 11, 2010
– Bontan Corporation Inc. (OTCBB: BNTNF, FSE:BZ3) (”The Company”, “Bontan”) is
pleased to announce that it has closed its previously announced non brokered
private placement financing, pursuant to which it has issued 37,750,000 Units at
a price of US$0.20 per Unit to raise aggregate gross proceeds of US$7,550,000.
Each Unit consists of one common share of the Company and one five-year term
purchase warrant. Each warrant entitles the holder to acquire one
additional common share of the Company at an exercise price of $0.35 per share.
There is a call provision should the closing price of the Company’s common
shares exceed US$1.00 for 20 consecutive business days. All securities issued in
the financing are subject to a statutory hold period. In connection with the
private placement the Company has paid a finder’s fee of no more than 10% of the
gross proceeds to certain finders assisting in the offering and also issued an
aggregate of 3,775,000 compensation warrants to such finders. These warrants
have the same terms as the warrants forming part of the Units issued under the
private placement financing.
Certain
proceeds from the offering have been used with respect to the Company’s 11% net
working interest in the two drilling licenses in offshore
Israel: Sarah and Myra. The Company’s ownership of theses licenses is
held through its 76.8% owned subsidiary: Israel Petroleum Company,
Limited (“IPC”).
The
Company is pleased to report that all seismic data relating to the two licenses
have now been fully acquired from Western Geco International Ltd, a Schlumberger
group company, who were paid the balance of their fees of US$ 10.5 million. All
of the seismic data is now being processed.
Bontan
also reports that it is preparing an application to list on the Canadian
National Stock Exchange (CNSX). The CNSX is an innovative new stock exchange for
trading the securities of public companies. The Company must meet all
requirements of the Exchange prior to any approval.
Kam Shah,
CEO of Bontan, commented, “We are very pleased with the progress our Company has
made over the last seven months. We have met all of our financial obligations in
relation to the offshore Israeli project and look forward to further
developmental activities in both the Sarah and Myra licenses. We have received
tremendous support from our existing shareholders as well as from new
sophisticated investors who participated in our recent private placement. The
recent reports from the US Geological Survey indicating that there are some 1.7
Billion barrels of recoverable oil and 122 Trillion cubic feet of gas in the
83000 square kilometer Levant Basin Province augurs well for our project. In
addition the fact that the offshore area has also recently attracted the
attention of various energy giants including Gazprom, bodes extremely well for
our project. Identifying an international driller and operator will enable us
and our joint venture partners to proceed with the plans to drill in both the
licenses. It should be a very exciting year ahead for our company.
About
the Project Area
The
Offshore Israel Project comprises two Licenses – Sarah and Myra - covering
approximately 310 square miles and is located in the Levantine Basin near the
recent 6.3 TCF Tamar 1, Tamar 2, and the Dalit natural gas
discoveries by Noble Energy Inc.
The right
to licences is held by a group comprising Bontan’s majority-owned subsidiary,
Israel Petroleum Company, Limited (“IPC”), Tel Aviv-based Emanuelle Energy Ltd.
(“Emanuelle”) and IDB-DT Energy (2010) Ltd. (“IDB-DT”) Under an Agreement
entered into on March 24, 2010.
The right
to licenses is currently listed in PetroMed’s name on the registry maintained by
the Israel Ministry of National Infrastructures (“MNI”). PetroMed is now
effectively controlled by one of the group members and has given unconditional
release to the group for transfer of its rights. Conditioned on the MNI’s
transfer approval, IPC, Emanuelle and IDB-DT will receive respective working
interests on the Registry of 14.325%, 54.025% and 27.15% in the PetroMed’s Share
of the Licenses.
Chapman
Petroleum Engineering Ltd, an independent Calgary based consulting firm (http://www.chapeng.ab.ca/) prepared
a Prospective Resource Evaluation Report , effective January 1,
2010 in accordance with National Instrument 51-101, Section 5.9
standards for review and assessment of prospective resources , which provided a
low estimate of 5.71 TCF and high of 7.34 TCF of gross prospective resources on
the Sarah /Myra prospects.
About
Bontan Corporation Inc.:
Bontan
Corporation Inc. is an oil and gas exploration company that operates and invests
in exploration prospects. Through its subsidiaries, Bontan seeks
highly visible opportunities in countries around the globe with a history of
natural resource production that offer exciting and attractive
propositions. Bontan seeks to minimize risk by bringing in either
joint venture, carried or working interest partners, depending on the size and
scale of the project.
Bontan
currently has 78,199,076 common shares issued and outstanding and is debt
free.
For
further information, refer to our website www.bontanoilandgas.com and
contact Bontan’s investor relations representative, John Robinson at Current
Capital Corp., at (416) 860-0211.
Forward-Looking
Statements
This news
release includes forward-looking statements within the meaning of the U.S.
federal and Canadian securities laws. Any such statements reflect
Bontan’s current views and assumptions about future events and financial
performance. Bontan cannot assure that future events or performance
will occur. Important risks and factors that could cause actual
results or events to differ materially from those indicated in our
forward-looking statements, including: the effect of economic and
political developments in Israel; the discretion of the MNI to
cancel, extend the time for compliance with or otherwise waive requirements of,
the Licenses or to reinstate the Permit; the discretion of the MNI to
officially transfer the Licenses on the Registry to IPC and our other partners;
the reliance on Emanuelle, IDB-DT and IPC, as well as third-party consultants
and contractors, to develop the Project; the ability of Bontan and
IPC to raise sufficient capital and demonstrate adequate financial capability to
the MNI, and the associated dilution to current investors’ interests associated
with the issuance of additional debt and equity securities; the risk
that the Data may show or suggest, or that the License sites ultimately may
contain no, or limited amounts of, hydrocarbons; the volatility in
commodity prices for crude oil and natural gas; the presence or
recoverability of estimated reserves; the potential unreliability or
other effects of geological and geophysical analysis and
interpretation; exploration and development, drilling and operating
risks; competition for development of the
Project; environmental risks; government regulation or
other action; potential disruption from terrorist activities or
warfare in the region or at the Project site; general economic
conditions; and other risks we identify from time to time in our
filings with the U.S. Securities and Exchange Commission and securities
regulators in Canada. Bontan assumes no obligation and expressly
disclaims any duty to update the information in this Press Release.
--0830928.01