Pearl Exploration and Production Ltd.
TSX VENTURE : PXX

Pearl Exploration and Production Ltd.

May 17, 2006 13:52 ET

Pearl Announces Cdn $42 Million Private Placement Closed

CALGARY, ALBERTA--(CCNMatthews - May 17, 2006) -

Not for distribution to the United States newswire services or for dissemination in the United States.

Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX VENTURE:PXX) is pleased to announce that the private placement announced on May 2, 2006 has closed. The Company sold on a non-brokered, private placement basis an aggregate of seven (7) million common shares of the Company at a price of Cdn $6.00 per share for gross proceeds of Cdn $42 million. A 3.5% finder's fee is payable on a portion of the private placement. The shares issued pursuant to the private placement are subject to a four-month hold period expiring on September 13, 2006 (as to 6,915,000 common shares) and on September 17, 2006 (as to 85,000 common shares).

Net proceeds of the private placement will be used towards any requisite cash consideration for possible acquisitions, to pay down debt assumed pursuant to the Pan Global transaction which completed on April 28, 2006 as well as for development of its oil and gas projects in the U.S. and Canada and general working capital purposes.

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities. Additional information on Pearl is available on our website at: www.pearleandp.com.

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks an uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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