Compass Petroleum Ltd.
TSX VENTURE : CPO

Compass Petroleum Ltd.

January 25, 2011 09:10 ET

Compass Petroleum Ltd. Announces Closing of $17.25 Million Financing

CALGARY, ALBERTA--(Marketwire - Jan. 25, 2011) -

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

Compass Petroleum Ltd. ("Compass" or the "Corporation") (TSX VENTURE:CPO) announced today that it has closed its previously announced public offering of common shares for gross proceeds of $17.25 million. A total of 11,896,552 common shares were sold, which includes shares issued on the exercise of a 15% over-allotment option granted to the agents retained by the Corporation for purposes of the offering. The sale price of each share sold in connection with the offering was $1.45. The Offering was led by Raymond James Ltd., and included a syndicate of agents consisting of Wellington West Capital Markets Inc. and Canaccord Genuity Corp.

The Corporation intends to use the net proceeds of the offering to: (i) repay outstanding bank indebtedness in the approximate amount of $4.2 million, which was incurred in connection with the Corporation's exploration and development activities in its west Saskatchewan core area; (ii) fund the Corporation's exploration and development of its west Saskatchewan core area for the remainder of the Corporation's current fiscal year, including the drilling of additional Viking oil wells at Lucky Hills; and (iii) for general corporate purposes.

Cautionary Note Regarding Forward-Looking Statements

This news release contains certain forward-looking information (collectively referred to herein as "forward looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "intend", "expect", "may", "will", or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to the proposed use of the net proceeds of the offering noted above.

Forward-looking statements are based upon the opinions and expectations of management of the Corporation as at the effective date of such statements. Although the Corporation believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as changes in general economic conditions in Canada, the United States and elsewhere, changes in the financial markets in Canada, the United States and elsewhere, the volatility of prices for oil and gas and other commodities, commodity supply and demand, fluctuations in currency and interest rates, the ability to obtain all required regulatory approvals on a timely basis and on satisfactory terms, and new laws and regulations (domestic and foreign). In addition to the general risk factors noted above, forward-looking statements respecting the anticipated use of the net proceeds of the offering are subject to the risk that a material change in the Corporation's business or operating conditions could necessitate a reallocation of the net proceeds of the offering. Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this news release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes.

Forward-looking statements respecting the anticipated use of the net proceeds of the offering are based upon various assumptions and factors, including the terms of the agency agreement entered into between the Corporation and the agents retained for purposes of the offering, the current capital budget of the Corporation (which is subject to change) and that there will be no material changes to the Corporation's business or operating conditions.

The forward-looking statements contained in this news release are made as of the date hereof and Compass does not undertake any obligation to publicly update or to revise any of those forward-looking statements, except as required by applicable Canadian securities laws. The forward-looking statements contained herein are expressly qualified by this cautionary statement. 

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.

Contact Information

  • Compass Petroleum Ltd.
    Yook L. Mah
    President and Chief Executive Officer
    (403) 261-1911
    or
    Compass Petroleum Ltd.
    Graham Barnes
    Chief Financial Officer
    (403) 261-1911
    info@compasspetroleum.com