Orleans Energy Ltd.

Orleans Energy Ltd.

June 10, 2009 07:57 ET

Orleans Energy Announces Bought Deal Equity Financing

CALGARY, ALBERTA--(Marketwire - June 10, 2009) -


Orleans Energy Ltd. ("Orleans" or the "Company") (TSX:OEX) is pleased to announce that it has entered into an equity financing agreement on a "bought deal" basis (the "Financing"). Pursuant to the terms of the Financing, Orleans will issue, on an underwritten basis, 9,091,000 common shares at a price of $2.20 per share for total gross proceeds of $20,000,200. The Financing will be underwritten by a syndicate of underwriters co-led by GMP Securities L.P. and Peters & Co. Limited and including National Bank Financial Inc., Dundee Securities Corporation, Thomas Weisel Partners Canada Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., and RBC Dominions Securities Inc.

The Financing is subject to customary stock exchange approval. The common shares will be offered in all provinces of Canada (except Quebec), by way of a short form prospectus, and in the United States of America on a private placement basis pursuant to exemptions from registration requirements. The Financing is expected to close on or about June 30, 2009. After giving effect to the Financing, Orleans will have 62.05 million common shares issued and outstanding.

The net proceeds of the Financing will initially be used by Orleans for general corporate purposes, specifically reducing bank indebtedness, thereby enhancing borrowing capacity to subsequently fund: (i) the drilling of a new, strategic Montney exploration prospect on Orleans' recently acquired 13 section contiguous Alberta Crown land block (ii) additional development drilling of the Montney reservoir at Kaybob in West Central Alberta, both of which enable the Company to take advantage of the recently-introduced Alberta Government drilling incentives; and (iii) the additional capital incurred in connection with the recent installation of Orleans' new, strategic Kaybob pipeline project.

Orleans Energy Ltd. is a Calgary, Alberta-based emerging crude oil and natural gas company, with common shares trading on the Toronto Stock Exchange under the symbol "OEX". Orleans is a team of dedicated, experienced professionals focused on the creation of shareholder value via acquisition, exploration and development of crude oil and natural gas assets in Alberta, Canada.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy the securities in any jurisdiction.

This news release is not for dissemination in the United States or to any United States news services. The common shares offered under the Financing will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.

The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

In this news release, reserves and production data are commonly stated in barrels of oil equivalent ("boe") using a six to one conversion ratio when converting thousands of cubic feet of natural gas ("mcf") to barrels of oil ("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or "ngls"). Such conversion may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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