Cirrus Energy Corporation

September 21, 2009 08:15 ET

Cirrus Energy Corporation Announces $45 Million Bought Deal Financing and Operational Update

CALGARY, ALBERTA--(Marketwire - Sept. 21, 2009) -


Cirrus Energy Corporation ("Cirrus" or the "Corporation") (TSX VENTURE:CYR) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc. and including FirstEnergy Capital Corp., BMO Capital Markets, Haywood Securities Inc., Macquarie Capital Markets Canada Ltd. and Raymond James Ltd. to issue on a "bought deal" basis 14,290,000 common shares ("Common Shares") at an issue price of $3.15 per Common Share for gross proceeds of approximately $45.0 million (the "Offering"). As consideration for their services, the underwriters shall receive 5% of the gross proceeds of the offering.

Cirrus has also granted the underwriters an option (the "Over-Allotment Option") to purchase up to an additional 2,143,500 Common Shares to cover over-allotments, if any, for additional gross proceeds of approximately $6.75 million. The Over-Allotment Option is exercisable in whole or in part for a period of 10 days following closing of the Offering.

The Offering is scheduled to close on or about October 14, 2009 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange. Proceeds of the Offering will be used to fund the Corporation's capital program, fund future acquisitions and for general working capital requirements. The Common Shares will be offered in certain provinces of Canada by way of a short form prospectus.

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

Operations Update

M7-A Field (Cirrus 42.75%, operator)

Since startup on September 12, 2009, production from the M7-A field has been steady at between 21.4 and 22.4 MMscf/d gross as per the contractually agreed maximum processing and transportation capacity at the L09-FF platform with well M7-A1X producing at a FWHP of 4,524 psig. Gas from the M7-A field is processed at the L09-FF platform which has a scheduled three day shutdown later this year. No other shutdowns are currently scheduled until next summer.

L8-D Development Project (Cirrus 25.5%, operator)

The Noble Lynda Bossler jackup drilling rig arrived at the L11b-A platform location on September 18 and the second appraisal/development well on the L8-D field is expected to spud on or about September 22. The well (called L11b-A07) is expected to take 90 days to drill and, if successful, test and complete.

Preparations for L8-D field production to commence from the existing L11b-A06 well on the L11b-A platform are proceeding on schedule with first production expected in early October, 2009. It is planned to conduct concurrent production and drilling operations at the L11b-A platform.

Cirrus Energy Corporation is an international oil and gas company headquartered in Calgary and currently has approximately 78.7 million fully diluted common shares outstanding.

Cirrus Energy Corporation
Suite 208, 5 - Richard Way S.W.
Calgary, Alberta T3E 7M8, Canada

Forward-Looking Statements

This press release may include forward-looking statements including opinions, assumptions, estimates and expectations of future production, cash flow and earnings. When used in this document, the words "anticipate", "believe", "estimate", "expect", "intent", "may", "project", "plan", "should" and similar expressions are intended to be among the statements that identify forward-looking statements. Forward-looking statements are subject to a wide range of risks and uncertainties, and although the Company believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. Any number of important factors could cause actual results to differ materially from those in the forward-looking statements including, but not limited to, the volatility of oil and gas prices, the ability to implement corporate strategies, the state of domestic capital markets, the ability to obtain financing, changes in oil and gas acquisition and drilling programs, operating risks, production rates, reserve estimates, changes in general economic conditions and other factors more fully described from time to time in the reports and filings made by Cirrus with securities regulatory authorities.

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

Contact Information

  • Cirrus Energy Corporation
    David Taylor
    President and Chief Executive Officer
    (403) 216-5030
    (403) 265-9530 (FAX)
    Cirrus Energy Corporation
    Pam Orr
    Vice President, Finance and Chief Financial Officer
    (403) 216-5030
    (403) 265-9530 (FAX)