May 17, 2006 08:45 ET

ExAlta Announces Increased Capital Program and $11.9 Million Financing

CALGARY, ALBERTA--(CCNMatthews - May 17, 2006) - ExAlta Energy Inc. ("ExAlta" or the "Corporation") (TSX:EXA) announced today that the Board of Directors has approved an increase to the Corporation's 2006 capital budget to $64 million from the original budget of $55 million. The increase is mainly related to a new exploration and development project at Josephine and the expansion of the existing drilling program at Eaglesham. At Josephine, located in ExAlta's Grande Prairie focus area, ExAlta will acquire approximately 50 sections of new 3-D seismic and plans to drill six multi-zone prospects in the second half of 2006 with a joint venture partner. At Eaglesham, ExAlta and its joint venture partners will expand the 2006 drilling program to include an additional four exploration wells targeting new reserves defined by regional 3-D seismic.

In addition, ExAlta announced that it has entered into a bought deal financing agreement with a syndicate of underwriters led by FirstEnergy Capital Corp. and including Raymond James Ltd., MGI Securities Inc. and Tristone Capital Inc. Pursuant to the terms of the agreement, 1.7 million flow-through common shares will be issued on a bought deal private placement basis at a price of $7.00 per flow-through common share for total gross proceeds of $11.9 million. Closing is expected to take place on or about June 6, 2006 and is subject to normal regulatory approvals. The proceeds received from the sale of the flow-through common shares will be used to fund qualifying exploration activities on ExAlta's properties.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction. The common shares of ExAlta have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Contact Information

  • ExAlta Energy Inc.
    James S. Blair
    Chairman & Chief Executive Officer
    (403) 206-2404
    ExAlta Energy Inc.
    Ian R. Robinson
    Vice President & Chief Financial Officer
    (403) 206-2410
    ExAlta Energy Inc.
    1900, 520 - 5th Avenue SW
    Calgary, Alberta T2P 3R7
    (403) 206-2400
    (403) 206-2409 (FAX)