Canoel International Energy Ltd.
TSX VENTURE : CIL

Canoel International Energy Ltd.

October 17, 2008 16:17 ET

Canoel Announces Financing by Short Form Offering Document

CALGARY, ALBERTA--(Marketwire - Oct. 17, 2008) - Canoel International Energy Ltd. ("Canoel" or the "Corporation") (TSX VENTURE:CIL.P) is pleased to update its brokered financing, being marketed by Northern Securities Inc. ("Northern"), which had been previously announced on September 19, 2008. Canoel and Northern have entered into an agency agreement, pursuant to which Northern will offer for sale, as agent on behalf of Canoel, up to 8,000,000 units of the Corporation ("Units") at a price of $0.25 per Unit for gross proceeds of up to CDN$2,000,000 by way of a Short Form Offering Document in the Provinces of Alberta and British Columbia (the "SFOD Offering"). The SFOD Offering forms part of a larger offering of a minimum of 12,000,000 Units and a maximum of 32,000,000 Units for gross proceeds of up to CDN$8,000,000. The remainder of the Units in the larger offering will be offered for sale by Canoel and by Northern, as agent on behalf of Canoel, on a private placement basis.

Each Unit consists of one common share in the capital of the Corporation ("Common Share") and one (1) Common Share purchase warrant (a "Warrant"). Each Warrant shall entitle the holder thereof to acquire one (1) Common Share (a "Warrant Share") at a price of CDN$0.40 for a period of 24 months following the Closing Date subject to early termination as follows: If the closing price of the Common Shares on the Exchange for 15 consecutive trading days (whether or not a trade occurs on one or more of such days) at any time after the expiry of four months and one day following the Closing Date exceeds CDN$0.60 per Common Share (the "Triggering Event"), the Warrants must be exercised by the Subscriber within 30 days (including non-trading days) of notice thereof from the Corporation (which the Corporation must give, if it so elects, within 5 business days of the Triggering Event) or the Warrants will terminate.

Northern will receive a cash commission equal to 8% of the gross proceeds received by the Corporation from the sale of the Units and, if the maximum SFOD Offering is raised, a work fee of $50,000 plus applicable taxes. In addition, Canoel will grant Northern a non-transferable option entitling Northern, for a period for twenty four (24) months from the closing of the SFOD Offering, to purchase such number of Units, at an exercise price of $0.25 per Unit, as is equal to 8.5% of the aggregate number of Units sold.

Any financing conducted by the Corporation will be subject to the approval of the TSX Venture Exchange, and closing of the offering, including the SFOD Offering, is subject to completion of the Qualifying Transaction described below. It is anticipated that there will be no change of control of the Corporation as a result of the aforesaid financing.

Canoel previously announced, in its press releases dated July 21 and September 19, 2008, that it has entered into a farmout and participation agreement for the acquisition from Cygam Energy Inc. ("Cygam") of oil and gas interests in three onshore exploration permits in the Bazma, Jorf and Sud Tozeur areas of Tunisia. Canoel intends for the acquisition of the exploration permits to be the Corporation's Qualifying Transaction. The total gross proceeds raised in the combined financing will be used by the Corporation to pay its earning costs under the participation and farmout agreement with Cygam and its wholly owned subsidiary, Rigo Oil Company Limited, which minimum costs are estimated at CDN$2,299,621.

Trading in the common shares of the Corporation will remain halted until the Corporation has completed its Qualifying Transaction.

ABOUT CANOEL

Canoel is a capital pool company ("CPC") that was listed on April 10, 2008. Canoel has not commenced commercial operations and has no assets other than cash. Except as specifically contemplated in the CPC policy, until the completion of the qualifying transaction, the Corporation will not carry on business, other than the identification and evaluation of companies, business or assets with a view to completing a proposed qualifying transaction.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Canoel International Energy Ltd.
    James Lawson
    Director
    (403) 269-3955
    (403) 263-4247 (FAX)