BrazAlta Resources Corp.
TSX VENTURE : BRX

BrazAlta Resources Corp.

December 21, 2006 15:55 ET

BrazAlta Announces the Acquisition of a Second Drilling Rig, an Operations Update and Up to a $10 Million Private Placement

CALGARY, ALBERTA--(CCNMatthews - Dec. 21, 2006) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

BrazAlta Resources Corp. ("BrazAlta") (TSX VENTURE:BRX), is pleased to announce that it has entered into agreements to purchase a second drilling rig (the "Drilling Rig") and various other drilling equipment for a purchase price of approximately US $7.5 million, with all such agreements held subject to the closing of the private placement described in this release below. The primary equipment purchased is an IR Cabot 2550 Drilling Rig, complete with a Top Drive and all required supporting equipment. BrazAlta expects the Drilling Rig will land in Brazil and be operational by the end of the second quarter of 2007.

Operational Update

BrazAlta is pleased to report that it has drilled, cased and completed two wells in the Santana field with total gross production of 32 barrels of oil per day from the Catu formation.

It has been determined that BrazAlta's other rig will continue to drill surface and intermediate casing for the development wells until January 15, 2007 at which time it will be moved to the North Eastern region of Reconcavo to drill shallow targets in the 1,000 to 1,300 meter range.

Private Placement

BrazAlta is pleased to announce that it has entered into a financing agreement to issue 5,834,000 units (the "Units") on a "bought deal" private placement basis (the "Financing"), at a price of $1.20 per Unit for gross proceeds of $7,000,800. Each Unit consists of one common share (the "Common Shares") and one half of one common share purchase warrant (the "Warrants") in the capital of BrazAlta. Each full Warrant will entitle the holder to purchase one Common Share at an exercise price of $2.00 exercisable for 18 months from the closing date of the Financing. The Financing is led by Westwind Partners Inc. and includes FirstEnergy Capital Corp. (the "Underwriters").

BrazAlta has also granted the Underwriters an option (the "Underwriters' Option") to purchase an additional 2,500,000 Units, for additional gross proceeds of $3,000,000. The aggregate gross proceeds of the Financing if the Underwriters' Option is exercised is $10,000,800.

The Financing is scheduled to close on or about January 10, 2007 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

About BrazAlta Resources Corp.

BrazAlta is a publicly traded Canadian-based international oil and gas exploration and production company with operations in Brazil, Northern Ireland and Canada.

This press release may contain statements within the meaning of safe harbour provisions as defined under US Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

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

Contact Information

  • BrazAlta Resources Corp.
    David R. P. Mears
    President & CEO
    (403) 561-1648
    Email: dmears@brazalta.com