LITTLETON, Colo., Nov. 28, 2006 (PRIME NEWSWIRE) -- Eternal Energy Corp. (OTCBB:EERG) announced today that it will participate in the exploration and development of a large oil and gas resource opportunity in Western Canada through a private Canadian company that was formed for the sole purpose of developing this project. Initially, EERG will own fifteen percent (15%) of the equity in that company. The remaining eighty-five percent (85%) will be held by individual private investors.
In addition, EERG will own a five percent (5%) overriding royalty interest on all leases and wells drilled in the project area by the Canadian entity or its assigns. EERG's initial equity ownership and the overriding royalty interest were acquired at no cost.
If wells are drilled in the project area to test the geologic concept, EERG will receive a $250,000 USD spud fee for each of the first eight wells drilled. To date, over 40,000 acres have been acquired in the project area. Any future financings would proportionately dilute all of the stockholders of the Canadian company.
EERG further announced today that it has elected not to pursue the acquisition of Zavanna Canada Corp. After a review of its portfolio, assets, and performance, EERG determined that currently pursuing the Zavanna acquisition is not in the best interests of EERG's stockholders. In connection with EERG's election, Zavanna will return 50% of the purchase deposit.
About Eternal Energy Corp.:
Eternal Energy Corp. is an oil and gas company engaged in the exploration for petroleum and natural gas in the State of Nevada and the North Sea. The company was incorporated in Nevada on July 25, 2003 to engage in the acquisition, exploration and development of natural resource properties.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release contains statements that are forward-looking, such as statements related to the future anticipated direction of the industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth, and potential contracts. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of Eternal Energy Corp. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, and domestic and global economic conditions.