Fairquest Energy Limited

Fairquest Energy Limited

May 11, 2006 12:14 ET

Fairquest Energy Closes $34.65 Million Flow-Through Common Share Private Placement Financing

CALGARY, ALBERTA--(CCNMatthews - May 11, 2006) -


Fairquest Energy Limited ("Fairquest" or the "Company") (TSX:FQE) is pleased to announce that it has closed its previously announced private placement of 3,500,000 flow-through common shares at a price of $9.90 per flow-through common share for total gross proceeds of $34.65 million. The offering was co-led by GMP Securities L.P. and Sprott Securities Inc. and included Canaccord Capital Corporation, Raymond James Ltd. and BMO Nesbitt Burns Inc.

The proceeds of the financing will be used for Fairquest's capital program in 2006. The capital progam for 2006 totals $80 million. Canadian exploration expenditures will be renounced to subscribers for the flow through shares effective on or before December 31, 2006.

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 offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward Looking Statements: Certain information regarding the Company in this news release including management's assessment of future plans and operations, renunciation of expenditures to subscribers and the use of the proceeds from the private placement, may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuation, imprecision of reserve estimates, environmental risks, economic changes, the effects of weather, competition from other producers, inability to retain drilling rigs and other services, the timing and length of plant turnarounds and the impact of such turnarounds and the timing thereof, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, the 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 the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), or at the Company's website (www.fairquestenergy.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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