COLONIA ENERGY CORP.
TSX VENTURE : CLA

COLONIA ENERGY CORP.

December 11, 2009 09:00 ET

Colonia Energy Corp. Sets Record Date for Rights Offering

CALGARY, ALBERTA--(Marketwire - Dec. 11, 2009) -

NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES OR TO UNITED STATES NEWS WIRE SERVICES.

Colonia Energy Corp. ("Colonia" or the "Corporation") (TSX VENTURE:CLA) is pleased to announce that it is proceeding with its previously announced rights offering to shareholders of Colonia ("Rights Offering") resident in the provinces of Alberta, British Columbia, Saskatchewan, Manitoba, Ontario, Nova Scotia, Prince Edward Island, Newfoundland and Labrador and the Northwest Territories (the "Qualifying Jurisdictions"). Pursuant to the terms of the Rights Offering, shareholders of the Corporation residing in the Qualifying Jurisdictions as at December 23, 2009 (the "Record Date") will be granted rights (the "Rights") evidenced by transferable Rights certificates to purchase up to 13,915,875 common shares in the capital of the Corporation ("Common Shares"). A holder of Common Shares as at the Record Date will be entitled to one (1) Right per Common Share held and four (4) Rights will entitle the holder thereof to purchase one (1) Common Share at $0.14 per Common Share. There is no standby commitment or additional subscription privilege. Details of the Rights Offering are described in the Rights Offering Circular to be mailed to shareholders in connection with the Rights Offering.

The Corporation has received conditional approval from the TSX Venture Exchange Inc. (the "Exchange") for posting and listing the Rights and the Common Shares issuable thereunder, subject to the Corporation satisfying certain conditions pursuant to the policies of the Exchange. The Rights expire at 4:00 p.m. (Calgary time) on January 13, 2010 (the "Expiry Date").

Pursuant to the Exchange Bulletin dated December 10, 2009, the Common Shares are expected to commence trading on the Exchange on an ex-rights basis at the opening of business on December 21, 2009. This means that Common Shares purchased on or following December 21, 2009 will not be entitled to receive Rights under the Rights Offering. At that time, the Rights are expected to be posted for trading on a "when issued" basis on the Exchange under the symbol "CLA.RT". Trading of the Rights is expected to continue until 10:00 a.m. (Calgary time) on the Expiry Date.

Pursuant to the requirements under applicable securities legislation, a Rights Offering Circular dated December 4, 2009 has been accepted for filing by the securities regulatory authorities in the Qualifying Jurisdictions. The Rights Offering Circular and related materials will be delivered to all shareholders of the Corporation as of the Record Date. Rights certificates will not be issued or delivered to registered shareholders who are residents of jurisdictions other than the Qualifying Jurisdictions ("Non-Qualified Shareholders"). Olympia Trust Company will use its best efforts to sell the Rights evidenced by such Rights certificates on behalf of all such respective holders prior to the Expiry Date. The net proceeds (less any applicable withholding tax) of such sale will be paid to such holders on a pro rata basis after the Expiry Date.

Subscribers pursuant to Colonia's unit and common share private placement, which closed on November 19 and 23, 2009 (the "Private Placement"), have agreed not to exercise, sell, trade or otherwise convey any interest in any of the Rights issued to them in relation to the securities purchased pursuant to the Private Placement. Holders of the outstanding subscription receipts of Colonia will not receive any Rights as they will not be shareholders of the Corporation on the Record Date.

If all of the Rights are exercised, Colonia will receive gross proceeds of $1,948,222.50. The completion of the Rights Offering is not conditional upon Colonia receiving any minimum amount of subscriptions from shareholders. The proceeds of the Rights Offering will be used by the Corporation to fund general working capital and capital expenditures of the Corporation as well as to fund the expenses incurred by the Corporation in connection with its recent reorganization and the Private Placement.

Completion of the Rights Offering is subject to receiving all necessary regulatory and Exchange approvals.

Note Regarding Forward Looking Statements

This document contains forward-looking statements. More particularly, this document contains statements concerning the use of proceeds of the Rights Offering. The forward-looking statements are based on certain key expectations and assumptions made by Colonia, including expectations and assumptions concerning timing of receipt of required regulatory approvals and the satisfaction of other conditions to the completion of the Rights Offering.

Although Colonia believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Colonia 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. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, risks that required regulatory consents are not obtained on terms satisfactory to the parties or the board of directors of Colonia determines that it would be in the best interests of Colonia to deploy the proceeds for some other purpose and risks that other conditions to the completion of the Rights Offering are not satisfied on anticipated timelines or at all.

The forward-looking statements contained in this press release are made as of the date hereof and Colonia 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.

Neither the TSX Venture nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Colonia Energy Corp.
    Michael Erickson
    President & CEO
    (403) 355-8922
    or
    Colonia Energy Corp.
    Alex Wylie
    Vice-President, Finance & CFO
    (403) 410-3376
    or
    Colonia Energy Corp.
    Suite 725, 435 - 4th Avenue S.W
    Calgary, AB T2P 3A8
    (403) 355-8922