Nexstar Energy Ltd.

Nexstar Energy Ltd.

November 26, 2008 08:30 ET

Nexstar Energy Announces Initial Closing of Private Placement and Settlement of Bank Debt

CALGARY, ALBERTA--(Marketwire - Nov. 26, 2008) -


Nexstar Energy Ltd. (TSX VENTURE:NXE.A) (TSX VENTURE:NXE.B) ("Nexstar Energy" or the "Company") is pleased to announce that, further to the Company's press release issued on November 21, 2008, it closed the first tranche of its previously announced private placement of up to $3,500,000 (the "Private Placement"). The initial closing resulted in the receipt by the Company of gross proceeds of $2,660,000 from the sale of Units (the "Units"). The Company further advises that it is accepting additional subscriptions and intends to close up to a minimum amount of $2,900,000 in the Private Placement. The Company has scheduled a second closing to occur within the next two weeks to complete this minimum amount. Each Unit of the Private Placement is priced at $1,000 and is comprised of a $1,000 Convertible Debenture providing an 8% annual interest rate and 20,000 Purchase Warrants to acquire Flow-Through Class A Shares of the Company (the "Class A Warrants"). Each $1,000 Debenture will be purchased at an ascribed value of $980, will mature on November 21, 2010 at par and will be convertible at the option of the holder at any time prior to maturity into 20,000 Class A Shares of the Company. Each full Class A Warrant will be exercisable for one Class A Share of the Company at a price of $0.05 per share until November 21, 2009. The funds from the Private Placement will be utilized by the Company for exploration and development drilling in the Company's core areas, debt reduction and working capital. All securities issued pursuant to the Private Placement will be subject to a four month hold pursuant to applicable securities legislation. The Company agreed to pay finder's fees to Blackmont Capital Inc. on the private placement proceeds, which include a 1% reorganization fee, 8% on retail orders, 5% on fund orders and 6.5% broker warrants, which are convertible into Class A Shares of the Company at $0.05 until November 21, 2009.

The Company is also pleased to advise that in conjunction with the Private Placement, it has finalized the previously announced agreement with respect to settlement of its indebtedness with its major lender. As a result of this agreement, the Company has eliminated its bank debt.

About Nexstar Energy

Nexstar Energy is a newly reorganized junior oil and gas company that is focused on drilling multi-zone oil and natural gas prospects in western Canada, complemented by strategic acquisitions.

This document contains forward-looking information that is based on expectations and estimates as of the date of this document. This forward-looking information is information that is subject to known and unknown risks and other factors that may cause future actions, conditions or events to differ materially from the anticipated actions, conditions or events expressed or implied by such forward-looking information. Forward-looking information is information that does not relate strictly to historical or current facts, and can be identified by the use of the future tense or other forward-looking words such as "proposed", "believe", "expect", "anticipate", "intend", "plan", "estimate", "should", "may", "objective", "projection", "forecast", "continue", "strategy", "position" or the negative of those terms or other variations of them or comparable terminology. Examples of such forward-looking information in this document include but are not limited to the following, each of which is subject to significant risks and uncertainties and is based on a number of assumptions which may prove to be incorrect. The Company will be required to secure financing in order to participate in the projects referenced in this document and there is no assurance that the Company will be able to secure such financing. This forward-looking information represents the Company's views as of the date of this document and such information should not be relied upon as representing the Company's views as of any date subsequent to the date of this document. The Company has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. These factors are not intended to represent a complete list of factors that could affect the Company. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

13,032,869 Class A Shares

1,080,000 Class B Shares

ADVISORY: The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. The TSXV does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Nexstar Energy Ltd.
    Peter A. Carwardine
    President and CEO
    (403) 263-6133 ext. 201
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    Brian J. Spilchen
    VP Finance and CFO
    (403) 263-6133 ext. 202
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    603 - 7 Avenue SW, Suite 525
    Calgary, Alberta T2P 2T5