Drake Energy Ltd.

August 05, 2009 17:55 ET

Drake Energy Ltd.: Private Placement

CALGARY, ALBERTA--(Marketwire - Aug. 5, 2009) - Drake Energy Ltd. (the "Corporation") (TSX VENTURE:DPE) intends to complete a non-brokered private placement (the "Private Placement") for up to: (i) 1.5 million units ("Units") of the Corporation at an issue price of $0.10 per Unit, each Unit to consist of one (1) common share of the Corporation ("Common Share") and one (1) Warrant; and (ii) 3.75 million units ("Flow Through Units") of the Corporation at an issue price of $0.12 per Flow Through Unit, each Flow Through Unit to consist of one (1) Common Share issued on a "flow through" basis within the meaning of the Income Tax Act (Canada) and one (1) Warrant, for total gross proceeds of up to $600,000. Each Warrant will entitle the holder thereof to purchase one (1) Common Share at a price of $0.15 for a period of nine (9) months from date of closing of the Private Placement.

Completion of the Private Placement is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange (the "Exchange"). Closing of the Private Placement is expected to occur on or about September 01, 2009. The Corporation may pay commissions or finder's fees in connection with the Private Placement in accordance with Exchange policies. The Board of Directors and management of the Corporation are intending to purchase between 30% and 60% of the Private Placement.

The Corporation intends to use the proceeds from the Private Placement to fund a portion of its light crude oil development drilling and workover programs at Enchant and Sousa. Over the past two years, the Corporation has been developing core areas and drilling opportunities.

Drake Energy Ltd. is active in oil and gas exploration and development in Alberta and Saskatchewan. Headquartered in Calgary, Alberta, Canada, the Corporation is publicly traded on the Exchange under the stock symbol DPE.V.

Cautionary Statements

Certain statements contained in this release constitute forward-looking information. These statements relate to future events or future performance and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to: the terms and conditions of the Private Placement, including securities of the Corporation to be issued; the closing date of the Private Placement; the use of proceeds of the Private Placement; and the purchase by certain members of the Board of Directors and management of the Corporation of securities issued pursuant to the Private Placement. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include: the Corporation being able to obtain the necessary director and regulatory approvals; the trading price of the Common Shares remaining about or above $0.10; no changes to existing Exchange policies; and drilling programs for the Corporation remaining the same as forecast. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: conditions imposed by the Exchange, the failure to obtain the required directors' and Exchange approval to the Private Placement; general economic and business conditions; the inability to complete the Private Placement; and changes in the regulatory regulation. The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

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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