Cheyenne Energy Inc.
TSX VENTURE : CHY

Cheyenne Energy Inc.

July 14, 2005 11:43 ET

Cheyenne Energy Inc.: Closing of Private Placement and Increase in Credit Facility

CALGARY, ALBERTA--(CCNMatthews - July 14, 2005) - Cheyenne Energy Inc. (TSX VENTURE:CHY) ("Cheyenne" or the "Company") has closed, subject to final regulatory approval, the previously announced private placement financing led by Wolverton Securities Ltd. ("Wolverton"). Cheyenne issued 1.2 million common shares on a flow-through basis at a price of $0.85 per share for total gross proceeds of $1.0 million. Proceeds from this financing will be used to fund Qualifying Expenditures (as defined under the Income Tax Act (Canada)) for the drilling of additional wells in the areas of Camrose and Cessford, Alberta.

The Company has granted Wolverton broker options totalling 7.5% of the flow-through shares issued at a price of $0.85 per option expiring July 13, 2006. The shares and broker options are subject to a 4 month hold period ending November 14, 2005.

Cheyenne has also renegotiated and obtained an increase to its credit facility from a Canadian financial institution. The revolving operating demand loan has been increased to $2.2 million from $1.25 million and bears interest at prime plus 1.25%. The demand development loan has been increased to $1.5 million from $0.35 million and bears interest at prime plus 1.5%. The facility is secured by a $5.0 million debenture with a floating charge over all of the Company's assets.

Through recent purchases in the market, Tim Cooney, President & CEO of Cheyenne, has increased his direct and indirect shareholdings in the Company to 3.3 million shares or approximately 21% of the issued and outstanding shares. Mr. Cooney intends to hold these shares for investment purposes and may make further market purchases to increase his position slightly in the future.

Cheyenne Energy Inc. is a public energy company engaged in the exploration for and development and production of crude oil and natural gas, primarily in Western Canada. Cheyenne's corporate strategy is to grow and develop oil and gas reserves through the drill bit and add value for its shareholders.

This news may contain forward-looking information. Actual future results may differ materially from those contemplated herein.

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

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