Petroflow has executed its formal Joint Venture Agreement (JVA) with Patron Energy, LLC (Patron) to mutually develop the Hunton Resource Play and other formations in Oklahoma. Petroflow is currently involved in seven Oklahoma counties (the AMI) with Enterra Energy Trust (Enterra). This newest JVA significantly adds to Petroflow's extension plans in Oklahoma.

This JVA will allow Petroflow to own working interests that vary between 65% and 70% in three new project areas initiated by Patron. Specific advantages to Petroflow include leased mineral rights in approximately 4600 net acres of land in one of the project areas; plus existing evaluations of the geological potential within the other areas. In consideration, Petroflow paid Patron $US 1 million. The purchase price represented reimbursement to Patron for 70% of its costs in the three project areas. The purchase price comprehensively covers prospect fees, leasehold, land and administrative costs.

The Company expects further cost advantages in any capital expenditure program conducted on the JVA lands. While Petroflow will be responsible for its pro rata share of any mineral leases, the Company will not have to bear the promotional cost structure of its present Farmout Arrangement. Assuming on average that the Company enjoys comparable success in the JVA lands, Petroflow estimates that it will save 20% to 25% on its per reserve BOE finding costs as compared to the AMI with Enterra. Petroflow has been 100% successful in development of the Hunton Play in Oklahoma.

This JVA also gives Petroflow an existing 'right of first refusal' agreement with a team of experienced geologists in the Oklahoma region. Petroflow, with Patron, now holds 'right of first refusal' options on any projects proposed by the geological team; however, Petroflow is not obligated to participate.

"We are all very excited and confident about this joint venture as it adds three more areas to our extension program announced on June 5, 2008. Because the JVA is unburdened by any carried interests, we will further improve our economics on the Hunton Play. With our existing drilling experience of 61 wells, combined with these new opportunities and the additional geologic prospects offered by this venture, we have become a major player in the Hunton Resource Play" quotes John Melton, President and CEO of Petroflow Energy Ltd.

Tags: LLC, Patron Energy, Petroflow Energy