Unitech Energy Resources Inc.

Unitech Energy Resources Inc.

September 08, 2009 14:17 ET

Unitech Energy Announces Disposal Well Financing

CALGARY, ALBERTA--(Marketwire - Sept. 8, 2009) - Unitech Energy Resources Inc. ("Unitech" or the "Company") (TSX VENTURE:URX) today announces its intention to raise up to $900,000 to finance its portion of the Kotcho Lake Water Disposal Well (the "Well") project, and for general corporate purposes. Unitech owns an approximate 30% working interest in the Well and has been informed by the operator that well site preparation has begun with expected completion and full time operation by the end of September, 2009. Unitech's capital requirement related to the completion and full time operation of the Well is expected to be approximately $450,000.

The Well was originally drilled as a gas well (no economic reserves were found) in 2008 at a cost of approximately $7.5 million and a disposal license was granted in mid-2008. In the fall of 2008, a third-party performed an injectivity test and the Company was informed that the Well initially tested at 1.4m3/minute (over 2000 m3 per day). After the Well was tested, the Company was advised that a third party operator purchased a 70% working interest in the Well for approximately $2.1 million (comprised of cash and overrides). According to the operator, disposal prices in the area are currently approximately $25 per cubic metre.

Subject to the approval of the TSX Venture Exchange (the "Exchange"), Unitech proposes to raise an aggregate $900,000 of gross proceeds by issuing up to 750 units (each, a "Unit") at a price of $1,200 per Unit. Each Unit is proposed to consist 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 exerciseable 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.

The Debentures are expected to be issued pursuant to the terms of a trust indenture and are expected to 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 shall be secured by a 0.04% working interest in 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 may pay finders fees to eligible persons seeking subscribers to the financing, such finder's fees consisting of a cash commission of up to 8% of the gross proceeds and finder's fee warrants in a number equal to 2,000 finder's fee warrants for each Unit sold. Each finder's fee warrant shall be 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.

It is expected that insiders of Unitech will participate in the financing and subscribe for the maximum number of Units permitted by the Exchange (up to 25% of the financing).

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 and the terms of the financing (in particular the material terms attributable to the Debentures). 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, level of activity, performance or achievements. Consequently, there is no representation that the actual results achieved or the terms of the financing 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 could cause the terms of the financing or 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; geological, technical, drilling and processing problems and other difficulties in producing reserves; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to install pipeline facilities as and when expected; 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; uncertainties associated with estimating oil and natural gas reserves; 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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