Churchill Energy Inc.
TSX VENTURE : CEI

Churchill Energy Inc.

December 21, 2007 18:23 ET

Churchill Closes Private Placement Financing and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Dec. 21, 2007) - Churchill Energy Inc. ("Churchill") (TSX VENTURE:CEI) is pleased to announce that it has closed its previously announced non-brokered private placement financing for gross proceeds of $1,482,110. Churchill issued 2,862,500 common shares at a price of $0.30 per share and 1,781,028 common shares on a flow-through basis to incur Canadian development expenses at a price of $0.35 per share. Directors and Officers of Churchill subscribed for $752,650 (51%) of the private placement. The Company now has 35,691,669 shares outstanding.

The proceeds of the financing will be used to fund Churchill's 2008 capital expenditure program. Proceeds from the issuance of the flow-through common shares will be used to incur Canadian development expenses on Churchill's oil and natural gas properties prior to December 31, 2008 and will be renounced to subscribers of the flow-through common shares effective December 31, 2008.

The Company sold a 25 percent interest in a water flood project in Southern Alberta for $1,100,000. The deal is expected to close on December 28, 2007. Churchill has retained a 75% working interest in this project. Based on an independent simulation evaluation, the reservoir is estimated to have 4.5 mmstb's of original oil in place with an estimated 15 percent to 19 percent recovery factor. Pipelining is currently underway and water injection will begin in January 2008 with oil production expected to begin in summer 2008 once the pool has been re-pressured. Churchill has budgeted to drill three (3) wells on this project in the second half of 2008.

Churchill has also closed the sale of a 50 percent working interest in a section of land in the Chime area for proceeds of $375,000. The Company owns another eleven (11) sections of 100 percent lands and has granted the Purchaser the option to acquire a 50 percent interest in these sections by paying $375,000 per section and committing to participate in future operations on the lands to the extent of their working interests. The option expires the earlier of two years or non-participation in future operations. Churchill and its partner will proceed with their initial operation on the lands in the first quarter of 2008. In addition, the Company announces Gerard Dobek has resigned from his position as Vice President Exploration, effective December 31, 2007. Mr. Dobek will continue to assist the Company on a consulting basis.

The Company has also finished drilling a shallow test well in the Smoky area that has been cased as a potential gas well. This exploratory well will be completed in January, 2008.

These transactions give the Company the ability to move forward with its 2008 capital program which centers around its waterflood oil project in Southern Alberta and continued activity in the deep basin on Churchill's undeveloped lands.

THIS PRESS RELEASE DOES NOT CONSTITUE AN OFFER TO SELL SECURITIES OR A SOLICITATION FOR PURCHASERS TO BUY SECURITIES. THIS PRESS RELEASE IS NOT TO BE CONSTRUED AS A PUBLIC OFFERING IN ANY PROVINCE IN CANADA UNLESS A PROSPECTUS RELATING THERETO HAS BEEN ACCEPTED FOR FILING BY A SECURITIES COMMISSION OR SIMILAR AUTHORITY IN SUCH PROVINCE.

THIS PRESS RELEASE IS NOT AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THE COMMON SHARES OF CHURCHILL HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR ANY STATE SECURITIES LAWS AND, THEREFORE, MAY NOT BE OFFERED FOR SALE IN THE UNITED STATES, EXCEPT IN TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.

This press release contains forward-looking statements. 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. Should any of these risks or uncertainties materialize, or should assumptions underlying forward looking statements prove incorrect, actual results may vary materially from those described in this press release. Churchill believes the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct. Such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. The forward-looking statements contained in this newsletter are expressly qualified by this cautionary statement. Churchill does not assume any obligation to update these forward looking statements, except as required by law.

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

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