Unitech Energy Resources Inc.
TSX VENTURE : URX

Unitech Energy Resources Inc.

October 01, 2009 09:45 ET

Unitech Energy Announces Completion of Financing and Reduction in Flow Through Obligations

CALGARY, ALBERTA--(Marketwire - Oct. 1, 2009) - Unitech Energy Resources Inc. ("Unitech" or the "Company") (TSX VENTURE:URX) today announces the completion of its previously announced debt/equity financing. The Company issued a total of 612 units (each, a "Unit") at a price of $1,200 per Unit for aggregate gross proceeds of $734,400. Each Unit consisted of the following: (i) a non-convertible, secured debenture in the principal amount of $1,000 (each, a "Debenture"); (ii) 10,000 common shares of the Company at a deemed price of $0.02 per share; and (iii) 5,000 common share purchase warrants (each, a "Warrant"), with each Warrant being exercisable to acquire a common share at a price of $0.05 per share in the first year from the date of issuance, or at a price of $0.10 per share in the second year from the date of issuance. All of the securities issued under the financing are subject to a four month hold period in accordance with applicable securities laws.

The Debentures were issued pursuant to the terms of a trust indenture and have the following material terms: (i) a maturity date one year from the date of issuance, with the full principal amount due on maturity; (ii) bear interest on the principal amount of the Debenture at the simple rate of 12% per annum, which interest shall be paid quarterly, (iii) each $1,000 principal amount of a Debenture is secured by a pro rata working interest in the Company's Kotcho Lake Water Disposal Well project (the "Well"); and (iv) the Debentures may be redeemed by the Company, in whole or in part, at any time after the date of issue and prior to the maturity date.

The Company paid finders fees to eligible persons seeking subscribers to the financing, such finder's fees consisting of an aggregate of $13,920 in cash commissions and the issuance of an aggregate of 290,000 finder's fee warrants, each finder's fee warrant being exercisable to acquire a common share of the Company at a price of $0.05 per share for a period of one year from the date of issuance. In addition, insiders of Unitech participated in the financing and subscribed for an aggregate of 153 Units or 25% of the financing.

The Company will use the net proceeds of the financing to finance its portion of the Well and for general corporate purposes. Unitech owns an approximate 30% working interest in the Well and has been advised by the operator that the Company's capital requirement related to the completion and full time operation of the Well is $424,300. The Company has also been informed by the operator that well site preparation has been delayed due to weather and that completion and full time operation is now expected by the end of October, 2009.

Unitech also announces today that it has completed the transactions related to its previously announced intention to reduce its 2009 flow-through obligations. The Company has entered into agreements with certain shareholders that subscribed to the Company's flow-through offering that was completed in 2008. These shareholders have agreed to accept amended tax returns to reflect a reduction in an aggregate of $156,441 in flow through eligible expenses that were attributable to them for the 2008 tax year. In consideration for the additional tax that these shareholders will be required to pay, the Company has issued to these shareholders an aggregate of 1,770,487 common shares. 272,984 of these common shares were issued to a director of the Company at a deemed price of $0.05 per share and the remaining 1,497,503 common shares were issued at a deemed price of $0.035 per share. All of the common shares issued to these shareholders are subject to a four month hold period in accordance with applicable securities laws.

After completion of the financing and the share issuances outlined above, the Company has 49,379,148 common shares issued and outstanding.

About Unitech Energy Resources Inc.

Unitech uses its proprietary image analysis and pattern recognition system, called Leadscan, for a 'first look advantage' that drives Unitech's exploration strategy. Please visit Unitech's website at www.leadscan.ca. Shares of Unitech are listed for trading on the TSX Venture Exchange under the symbol URX.

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to: the completion and full time operation of the Well, the capital requirements for the Well, the intended use of proceeds from the financing and the reduction of flow-through obligations and the transactions related thereto. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved or the terms of the transactions described above will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, including fluctuations in the prices of oil and natural gas; governmental regulation of the oil and gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the oil and gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

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

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