Fairquest Energy Limited

Fairquest Energy Limited

October 12, 2005 16:06 ET

Fairquest Energy Closes $23 Million Bought Deal Private Placement

CALGARY, ALBERTA--(CCNMatthews - Oct. 12, 2005) -


Fairquest Energy Limited (TSX:FQE) ("Fairquest") is pleased to announce that it has closed its previously announced private placement of 1,000,000 common shares and 1,000,000 flow-through common shares at a price of $10.00 per common share and $13.00 per flow-through common share for total gross proceeds of $23 million. The offering was co-led by Sprott Securities Inc. and GMP Securities Ltd. and included Canaccord Capital Corporation, Raymond James Ltd. and Peters & Co. Limited.

The proceeds of the financing will be used to expand Fairquest's capital program for the remainder of 2005 and the first quarter of 2006. The $20 million increase in the capital program will be directed to additional development drilling at Columbia/Harlech and new exploration expenditures in the Deep Basin in Alberta. Flow-through expenditures will be renounced to subscribers for the flow through shares effective on or before December 31, 2005.

Fairquest is a Calgary based, junior oil and natural gas exploration and development company headquartered in Calgary, Alberta, Canada that was created on the reorganization of Fairborne Energy Ltd. completed on June 1, 2005. Its common shares trade on the Toronto Stock Exchange under the symbol "FQE".

The common shares have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a US person absent registration or an applicable exemption from the registration requirements.

Forward Looking Statements - Certain information regarding Fairquest Energy Limited (the "Company") set forth in this document, including management's assessment of the Company's future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom.

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