Breaker Energy Ltd.
TSX : WAV.A
TSX : WAV.B

Breaker Energy Ltd.

November 15, 2007 08:53 ET

Breaker Energy Ltd. Announces $5.5 Million Bought Deal Equity Financing and Increases in Light Oil Drilling

CALGARY, ALBERTA--(Marketwire - Nov. 15, 2007) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES

Breaker Energy Ltd. (TSX:WAV.A)(TSX:WAV.B) ("Breaker" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by FirstEnergy Capital Corp. and including Tristone Capital Inc., Blackmont Capital Inc., Dundee Securities Corporation, Wellington West Capital Markets Inc., BMO Capital Markets and Scotia Capital Inc. under which they have agreed to purchase for resale to the public, on a bought deal basis, 800,000 Common Shares on a Flow-Through basis ("Flow-Through Shares) at $6.90 each for aggregate gross proceeds of $5,520,000. All sales of Flow-Through Shares will be made on a private placement basis pursuant to exemptions from the prospectus requirements of applicable securities laws.

Closing is anticipated to occur on or about November 29, 2007 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange. The Flow-Through Shares will be subject to a four-month hold period.

Gross proceeds from the sale of the Flow-Through Shares will be used to fund ongoing exploration activities eligible for Canadian exploration expenses which will be renounced in favour of the subscribers of the Flow-Through Shares effective on or before December 31, 2007.

Breaker will expand its 2007 capital program by an additional $7.5 million to a total of $67.5 million, with an increased focus on high-netback light oil projects at Irricana and Girouxville. At Breaker's large light oil pool in Irricana, funds will be used to accelerate drilling new horizontal wells, and to recomplete existing horizontal wells with multiple fracture technology. As announced November 7th, Breaker has had significant success in this pool, with its first two new wells significantly outperforming the historical average well in the pool. Breaker's first multiple fracture operation on a previously-drilled horizontal well resulted in a more than tenfold increase in production rate, from 10 boe/d to a recent average rate of 110 boe/d, approximately one month after being put back on production. Breaker will also drill additional exploratory wells at Girouxville, where it has recently demonstrated a 100 percent success rate discovering high rate light oil pools.

Breaker's financial and operational flexibility gives it the ability to take advantage of current royalty rates via accelerated field activity to maximize the net present value of its high netback light oil drilling inventory.

A portion of the Flow-Through proceeds will also be invested in shooting a 3D seismic program early in 2008 on Breaker's 100 percent working interest high impact prospect in Monias, British Columbia. The prospect is a deep Leduc reef with an unrisked potential target size of 1 TCF.

Breaker re-iterates its previous guidance for 2007, as the increased field activity late in the fourth quarter will not result in appreciable increased production until early 2008.

Breaker Energy Ltd. is a junior oil and gas company focused on creating shareholder value by growing per share production and reserves through acquisitions and a focused exploration, development and exploitation plan.

Breaker has 35,130,258 Class A shares and 900,000 Class B shares outstanding.

Breaker trades on the Toronto Stock Exchange under the symbols WAV.A and WAV.B.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of Breaker within the United States. The securities of Breaker have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or any state securities laws. Accordingly, the shares may not be offered or sold in the United States or to U.S. persons (as such terms are defined in Regulation S under the 1933 Act) unless registered under 1933 Act and applicable state securities laws or an exemption from such registration is available.

Forward-Looking Statements

This press release contains forward-looking statements concerning the Company's expectations of future production, cash flow, earnings and expansion of its oil and gas property interests and concerning the Company's exploration and development drilling, seismic operations, regulatory applications, payout estimates, capital expenditures, number and drilling locations, seismic acquisitions and facility upgrades. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), acquisitions, commodity price, price and exchange rate fluctuation and uncertainties resulting from competition from other producers and ability to access sufficient capital from internal and external sources. Additional information on these and other risk factors that could affect the Company's operations and/or financial results are included in the Company's reports on file with Canadian securities regulatory authorities.

The forward-looking statements or information contained in this news release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

ADVISORY: This document contains forward-looking statements. More particularly, this document contains statements concerning the anticipated closing date of the offering and the anticipated use of the net proceeds of the offering. Although Breaker believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because Breaker can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.

The closing of the offering could be delayed if Breaker is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the offering will not be completed within the anticipated time or at all.

The intended use of the net proceeds of the offering by Breaker might change if the board of directors of Breaker determines that it would be in the best interests of Breaker to deploy the proceeds for some other purpose, such as an acquisition.

The forward-looking statements contained in this press release are made as of the date hereof and Breaker undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The TSX does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Breaker Energy Ltd.
    Dan O'Neil
    President & Chief Executive Officer
    (403) 215-5264
    or
    Breaker Energy Ltd.
    Max Lof
    Vice President, Finance & Chief Financial Officer
    (403) 215-5264
    Email: info@breakerenergy.com
    Website: www.breakerenergy.com/