Milagro Energy Inc.
TSX : MIG

Milagro Energy Inc.

December 21, 2007 16:01 ET

Milagro Energy Inc. Responds Regarding TSX Listing Eligibility Review

CALGARY, ALBERTA--(Marketwire - Dec. 21, 2007) - On December 20, 2007 the Toronto Stock Exchange ("TSX") announced that it is reviewing the eligibility of the common shares of the Milagro Energy Inc. (TSX:MIG) ("Milagro" or the "Company") for continued listing on the TSX. The TSX has advised the Company that its review has determined that the Company falls below the requirements of the TSX as to: (i) the financial condition and/or operating results of the Company, and (ii) the public distribution, price or trading activity of the Company's common shares. The Company is being reviewed under the TSX's Remedial Review Process and has been granted until February 4, 2008 to regain compliance with the TSX's requirements.

The Company understands that the review arises largely from the fact that, as the Company has disclosed previously, the Company has a significant working capital deficiency and its $10,800,000 bridge credit facility with Brookfield Bridge Lending Fund Inc. matures on December 31, 2007. The Company currently does not have sufficient cash available to repay the bridge credit facility when due. In addition, the recent trading price of the Company's common shares is below the range usually permitted by the TSX on a long term basis.

Management of the Company is continuing its efforts to raise capital to repay the bridge credit facility and fund future operations. The Company is currently in discussions with parties regarding potential equity offering transactions, which transactions may include amendments to the terms of the Company's outstanding convertible debentures. If such a transaction can be agreed upon by all relevant parties prior to the maturity date of the bridge credit facility, management of the Company expects that the Company would be in compliance with the TSX's listing requirements following the closing of the transaction. However, the Company has not settled the definitive terms with respect to such a transaction and there is no certainty that the Company will be in a position to enter into any definitive agreements or complete such a transaction.

If the Company is not able to conclude an agreement with its potential counterparties prior to December 31, 2007, it is unlikely that the Company will be able to continue as a going concern or maintain its listing on the TSX. The Company will provide further disclosure to the public as further material facts occur.

ABOUT MILAGRO

Milagro is an exploration and production company engaged in the acquisition, exploration, development and production of oil and natural gas reserves in western Canada.

READER ADVISORY

Statements in this press release may contain forward-looking information including expectations of funds to be raised in a financing, refinancing of the Company's existing credit facilities, the status of the Company's listing on the TSX and future capital expenditures and cash flow. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the company. These risks include, but are not limited to, the risks associated with the oil and gas industry, commodity prices, general economic conditions, conditions in the capital markets in Canada and elsewhere and exchange rate changes. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. The reader is cautioned not to place undue reliance on this forward-looking information. See "Risk Factors" in the Company's annual information form for the year ended December 31, 2006 for a further discussion of risks faced by the Company.

Contact Information

  • Milagro Energy Inc.
    Jeffrey Rekunyk
    CEO
    (403) 693-4006
    or
    Milagro Energy Inc.
    Travis Doupe
    CFO
    (403) 693-4007
    Website: www.milagroenergy.com