Capitol Energy Resources Ltd.
TSX VENTURE : CPX

Capitol Energy Resources Ltd.

September 12, 2005 08:24 ET

Capitol Energy Resources Ltd. Announces $35 Million Bought Deal Private Placement Financing

CALGARY, ALBERTA--(CCNMatthews - Sept. 12, 2005) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Capitol Energy Resources Ltd. ("Capitol") (TSX VENTURE:CPX) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Sprott Securities Inc., pursuant to which the underwriters have agreed to purchase common shares on a "bought deal" private placement basis as follows: (i) 6,452,000 common shares ("Common Shares") at an issue price of $4.65 per Common Share and (ii) 820,000 Common Shares issued on a "flow through" basis ("Flow-Through Shares") at an issue price of $6.10 per Flow-Through Share for gross proceeds to Capitol of $35.0 million (the "Offering").

Proceeds of the Offering will be used to fund Capitol's exploration and development program, including following up on Capitol's drilling success at Dixonville and Helen, and for working capital purposes. Capitol will agree to incur Canadian exploration expenses in the amount of the proceeds raised through the issuance of Flow-Through Shares (being $5 million) to be renounced to the subscribers for the Flow-Through Shares effective on or before December 31, 2005.

The Offering is scheduled to close on or about September 29, 2005 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.

Capitol is an emerging independent oil and gas company. Our business strategy involves building core areas through production acquisitions, development drilling and high quality exploration prospects thereby providing above average returns to our shareholders. We are primarily focused on pursuing natural gas opportunities in conjunction with economic oil opportunities that complement our efforts in the areas in which we operate.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Capitol Energy Resources Ltd.
    Monty Bowers
    President & CEO
    (403) 508-6321
    (403) 508-6309 (FAX)
    or
    Capitol Energy Resources Ltd.
    Doug Dearing
    Vice President, Finance & CFO
    (403) 508-6320
    (403) 508-6309 (FAX)