Calgary, Alberta, January 27, 2004 - Calvalley Petroleum Inc. (the “Company”) announces that effective January 23, 2004 it has redeemed its $3 million convertible debentures. On December 23, 2003 Calvalley notified the holders of the Company’s convertible debentures of its intention to redeem the debentures at par along with all unpaid and accrued interest. The holders have accepted redemption and a total payment of $3,344,753.42 was made to them on January 23, 2004.
The Company has farmed out an additional 5% working interest in exchange for $US 2.5 million, to its Yemen partner, Hoodoil Ltd. under an option agreement that was granted in 2001.
Calvalley has closed the $500,000 sale of its remaining Canadian operated oil and gas properties, effective December 1, 2003. The company is now positioned to focus 100% of its efforts on the development of Block 9 in the Republic of Yemen. The Company is the operator and 55% majority owner of Block 9 on which it has drilled four successful exploration wells over the past two years.