Drake Energy Ltd.

September 14, 2009 16:01 ET

Drake Focusing on Oil Targets

CALGARY, ALBERTA--(Marketwire - Sept. 14, 2009) - Drake Energy Ltd. (TSX VENTURE:DPE)


With strong oil prices and natural gas prices still weak, Drake Energy Ltd. (the "Company") is set to develop its oil prospects at Enchant and Sousa.

At its Enchant property, the Company has one oil completion planned for late September or early October. There are three follow-up locations planned for early 2010. The Company has an additional oil drilling location with up to 5 follow-up locations in the northern section. Each of the locations is supported by seismic.

At Sousa there is one re-entry and one drilling location identified for this winter. The drilling prospect is a follow up on one of Drake's existing oil wells. Two additional follow-up wells have been identified for the following season. Each of the locations is supported by seismic.

The Company will continue its efforts at cost control, prudent financial management, and considering undervalued acquisitions.

Private Placement

The Company has successfully completed the first tranche of its previously announced private placement (the "Private Placement") of 792,520 units ("Units") of the Company at an issue price of $0.10 per Unit, each Unit to consist of one (1) common share of the Company ("Common Share") and one (1) Warrant; and (ii) 2,307,333 units ("Flow Through Units") of the Company 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 $356,131.96. 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.

The Common Shares, Warrants, and Common Shares issuable upon exercise of the Warrants are subject to a hold period under applicable securities laws until January 15, 2009.

The Company 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.

"Strengthening our balance sheet, developing our oil assets, and continuing to pursue undervalued acquisitions will enable us to see the significant returns our investors expect when the market turns around." said Drake president, Mr. Neil Orr.

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

This news release contains forward-looking information, Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made the Company that the actual results achieved will be the same as those forecasted herein.

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

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