Canacol Energy Ltd.
TSX VENTURE : CNE

Canacol Energy Ltd.

May 05, 2010 10:11 ET

Canacol Energy Ltd. Announces Closing of $50 Million Bought Deal Prospectus Offering

CALGARY, ALBERTA--(Marketwire - May 5, 2010) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Canacol Energy Ltd. ("Canacol" or the "Corporation") (TSX VENTURE:CNE) is pleased to announce that it has closed its previously announced bought deal equity financing with a syndicate of underwriters co-led by Canaccord Financial Ltd. and FirstEnergy Capital Corp. and including Cormark Securities Inc. and Mackie Research Capital Corporation (collectively the "Underwriters"), pursuant to which the Underwriters purchased 66,667,000 common shares of the Corporation ("Common Shares") at $0.75 per Common Share and raised gross proceeds of $50,000,250 for the Corporation (the "Offering").

The Underwriters have been granted an over-allotment option to purchase, on the same terms as the Offering, up to an additional 10,000,050 Common Shares. This option is exercisable, in whole or in part, by the Underwriters, in their sole discretion, at any time before May 20, 2010. Additional gross proceeds of $7,500,038 will be realized, should the over-allotment option be exercised in full.

The net proceeds from this Offering will be used to fund seismic acquisition and drilling of exploration wells on the Corporation's heavy oil blocks in Colombia, including the newly acquired Cedrela E&P contract, the drilling of a second onshore Guyana exploration well on the Corporation's Takutu block, the acquisition of new exploration blocks in the June 2010 Colombia bid round, the repayment of a portion or all of the Corporations debt, and general corporate purposes.

Canacol is a Canadian-based international oil and gas corporation with operations in Colombia, Brazil and Guyana. The Corporation's public filings may be found at www.sedar.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This press release may contain statements within the meaning of safe harbour provisions as defined under Securities Laws and Regulations. The above statements are based on the current expectations and beliefs of Canacol's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

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