Pantera Drilling Income Trust Announces Rights Offering

    
    
    (TSX: RIG-UN.TO)
    

CALGARY, Sept. 22 /CNW/ - Pantera Drilling Income Trust ("Pantera" or the "Trust") announces that it is proceeding with a rights offering to unitholders of the Trust (the "Rights Offering"). Pursuant to the Rights Offering, each holder of trust units of the Trust (the "Trust Units") will receive one right (a "Right") for every Trust Unit held. For every four Rights held a holder thereof will be entitled to purchase one Trust Unit at a price of $3.13. Unitholders will also have the opportunity to acquire additional Trust Units beyond their entitlement through an additional subscription privilege. Details as to the operation of this privilege are described in the Rights Offering Circular to be mailed to unitholders in connection with the Rights Offering (the "Rights Offering Circular"). Pursuant to the Rights Offering, a maximum of approximately 1,686,277 Trust Units can be issued which represents 25% of the currently issued and outstanding Trust Units.

The record date for the Rights Offering has been set at October 1, 2008. The Rights will expire at 4:00 PM (Calgary time) on October 23, 2008. The Trust has received conditional approval for listing of the Rights and the Trust Units to be issued upon exercise of the Rights on the Toronto Stock Exchange (the "TSX"). Completion of the Rights Offering is subject to receiving all necessary regulatory and TSX approvals. For full details of the Rights Offering please see the Rights Offering Circular which has been filed with securities commissions in Canada and is available on SEDAR at www.sedar.com.

Stand-by Commitments

Stand-by commitments to purchase in the aggregate 100% of any Trust Units issuable pursuant to the Rights which are not acquired by other rightsholders are being provided by members of the Board of Trustees of the Trust (the "Board"). The terms of any subscription under the Stand-by commitments will be identical in all respects to those of unitholders as a whole under the Rights Offering.

Use of Proceeds

The Board recently approved an increase of $6.2 million in 2008 capital expenditures for the acquisition of certain assets to be utilized on the Trust's own rigs that are typically rented by the Trust's customers, including top drives, hevi-wate drill pipe and other ancillary equipment. Proceeds of the Rights Offering will be used to partially fund these capital expenditures. Contracts with existing clients have been amended to include these capital items which are expected to deliver a favorable return to the Trust. Although the Trust has sufficient availability under its existing credit facility to fund such capital expenditures, the Board has determined that the Rights Offering is a more appropriate manner of raising the funds required for such expenditures in order to ensure the Trust maintains a strong balance sheet.

Operations Update

As of the date hereof, Pantera's fleet of seven rigs is fully utilized. Six of the seven rigs are located in the Western Canada and have commitments to spring break-up 2009 and the seventh rig, located in Ontario, continues to be busy on short term contracts. Of the six rigs operating in Western Canada, four are under contracts of greater than one year length, and two of those contracts contain minimum day commitments.

Third Party Offers

The Trust generally has no obligation to disclose the existence or occurrence of discussions regarding potential business combinations involving the Trust that do not result in a definitive agreement. However, the Board believes that unitholders of the Trust should be aware that over the past few months, the Trust has been approached by certain unsolicited third parties in regard to exploring a potential sale or other business combination involving the Trust. With a view to the best interests of unitholders, the Board discussed proposals raised by such third parties and all such proposals involved consideration to be paid to unitholders of the Trust that would have represented a significant premium to the market price of the Trust Units. None of the proposals have resulted in a definitive agreement and there are no proposals before the Board that the Board is prepared to recommend for acceptance.

About the Trust

The Trust is an open-ended, investment trust governed by the laws of the Province of Alberta pursuant to the Deed of Trust. The Trust was established for the purpose of investing in property including the securities of Pantera Drilling Limited Partnership and Pantera Drilling Inc. The beneficiaries of the Trust are the holders of the trust units. The business of Pantera involves the provision of contract drilling services to oil and natural gas exploration and production companies operating in Canada.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States or to a U.S. person, absent registration or an applicable exemption therefrom.

Forward-Looking Statements

Certain statements included in this press release constitute forward-looking statements. Such forward-looking statements involve unknown risks, uncertainties and other factors that may cause actual results, performance or achievements of Pantera to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Additional factors that could affect Pantera's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) under Pantera's profile. Forward-looking statements in this press release may include, but are not limited to, statements regarding the proceeds to be realized from the Rights and the use of proceeds therefrom. For this purpose, any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as "may", "will", "should", "anticipate", "expects", "intends" and similar expressions. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Furthermore, the forward-looking statements contained herein are made as at the date hereof and Pantera does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Contacts

Terry Rosentreter
President and Chief Executive Officer
or Lorna Pollock
Chief Financial Officer at Ph: (403) 515-8400
Fax: (403) 515-8405
E-mail: terryr@panteradrilling.com
lpollock@panteradrilling.com