Zapata Energy Corporation
TSX VENTURE : ZCO

Zapata Energy Corporation

December 04, 2009 16:21 ET

Zapata Announces Equity Offering and Update to Corporate Presentation

CALGARY, ALBERTA--(Marketwire - Dec. 4, 2009) -

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Zapata Energy Corporation (TSX VENTURE:ZCO) ("Zapata") is pleased to announce that it has entered into a private placement financing agreement with a syndicate of agents led by Emerging Equities Inc. pursuant to which Zapata will offer for sale through the agents, on a "best efforts" basis, a minimum of 1,000,000 and a maximum of 2,000,000 units of Zapata ("Units") at a price of $3.00 per Unit, with each Unit consisting of one common share and one-half of a common share purchase warrant, with each whole warrant exercisable into one common share at a price of $4.00 per share for one year following the closing date, and up to 600,000 common shares of Zapata to be issued on a "flow-through" basis ("Flow-Through Shares") pursuant to the Income Tax Act (Canada) (the "Tax Act") at a price of $3.40 per Flow-Through Share, for minimum aggregate proceeds of $3,000,000 and maximum aggregate proceeds of $8,040,000 (the "Offering").

The Offering is scheduled to close on or about December 17, 2009 and is subject to certain closing conditions including, but not limited to, obtaining the minimum subscriptions for 1,000,000 Units, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange (the "TSXV"). The common shares and warrants comprising the Units and the Flow-Through Shares issued under the Offering will be subject to a hold period expiring four months and a day following the closing of the Offering. Zapata intends to use the gross proceeds from the sale of the Units to fund certain capital and general corporate expenditures, and the gross proceeds from the sale of the Flow-Though Shares will be used to incur "Canadian exploration expenses" under the Tax Act on or before December 31, 2010 in an amount equal to the aggregate subscription proceeds of the Flow-Through Shares, with all such amounts to be renounced by Zapata to subscribers effective for the 2009 tax year.

Zapata is also pleased to announce that its Corporate Presentation has been updated and is now available for viewing at Zapata's website at www.zapata.ca under the link "Investor Info - Presentation".

This press release may include forward-looking statements and forward-looking information ("forward-looking information") within the meaning of applicable Canadian securities laws. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "may", "will", "project", "should", objective", "continuous", "estimate" or similar words suggesting future outcomes. In particular, but without limitation, this press release includes forward-looking information relating to the anticipated closing of the Offering and the intended use of proceeds. Zapata believes that the expectations reflected in such forward-looking information are reasonable but no assurances can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon.

Forward-looking information is based on various assumptions. Those assumptions are based on information currently available to Zapata, including information obtained from third party industry analysts and other third party sources and include the historic performance of Zapata's business, current business and economic trends, trading data and cost estimates. You are cautioned that the preceding list of assumptions is not exclusive.

Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the Offering could be delayed if Zapata is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The Offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that the offering will not be completed within the anticipated time or at all. The intended use of the net proceeds from the sale of the Units by Zapata might change if the board of directors of Zapata determines that it would be in the best interests of Zapata to deploy the proceeds for some other purpose. Further risks and uncertainties relating to the business and operations of Zapata include but are not limited to the risks identified in Zapata's Annual Information Form for the year ended December 31, 2008 under the heading "Risk Factors".

The forward looking statements contained in this press release are made as of the date hereof and Zapata undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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