Newton Energy Corporation

January 25, 2008 18:47 ET

Newton Energy Corporation Announces Third Closing of Private Placement

CALGARY, ALBERTA--(Marketwire - Jan. 25, 2008) - Newton Energy Corporation ("Newton" or the "Company") is pleased to announce a third closing of $305,000 through the issuance of 610,000 Subscription Receipts (the "Subscription Receipts") of the Company at a price of $0.50 per Subscription Receipt in connection with its previously announced private placement of a minimum of $2,000,000 and up to a maximum of $5,000,000 of Subscription Receipts (the "Offering"). Each Subscription Receipt will be deemed to be exchanged, without payment of any additional consideration, for one consolidated common share of the Company ("Common Share"), upon the same terms as its previously announced first and second closings on September 12, 2007 and November 30, 2007, respectively. Following the closing of the Offering the Company has 5,015,886 common shares issued and outstanding. The securities issued pursuant to the Offering are subject to a four month hold period.

Pursuant to the Subscription Receipt Agreement dated September 12, 2007 among the Company, CIBC Mellon Trust Company ("CIBC") and Wolverton Securities Ltd. ("Wolverton"), the Company upon closing was paid 15% of the gross proceeds of the Offering in the amount of $29,805.15, net of the Agent's commission and costs. The remaining 85% of the gross proceeds were deposited into escrow with CIBC, as escrow agent, to be released to the Company when the Company is awarded by the UK Department of Trade and Industry not less than 65,000 acres of exploration licenses in the 13th Round of Onshore Licensing within the United Kingdom (the "Second Release Date"). The proceeds of the Offering will be used to meet the Company's obligations related to expected work commitments for the licenses it may obtain.

Wolverton, as agent, was paid a cash commission and costs of $23,944.85 of the gross proceeds of the Offering and, along with GundyCo. and TD Securities Inc. were granted an aggregate amount of 61,000 Agent's Options pursuant to the Agency Agreement dated September 12, 2007 (the "Agency Agreement") between the Company and Wolverton.

Newton is also pleased to announce that it has completed the incorporation of a wholly-owned UK subsidiary, "Newton Energy UK Ltd." ("Newton UK" or the "subsidiary") which has been established to run Newton's UK operations and to apply for a Petroleum Exploration and Development Licence in the up coming 13th round of onshore licensing in the UK. The submission deadline for this application is February 6, 2008. In conjunction with the incorporation of the subsidiary, Newton UK has established an office in the city of Nottingham which will be the base of its operations in the UK.

ADVISORY:

Certain information regarding Newton Energy Corporation including managements assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, environment risks, competition from other producers and ability to assess sufficient capital from those anticipated in the forward-looking statements.

The TSX Venture Exchange has neither approved or disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Newton Energy Corporation
    Michael Frey
    President and CEO
    (403) 410-3826
    or
    Newton Energy Corporation
    200, 638 - 11th Avenue SW
    Calgary, Alberta T2R 0E2
    (403) 410-3826
    Email: newtonenergy@shaw.ca