Compass Petroleum Ltd.
TSX VENTURE : CPO

Compass Petroleum Ltd.

May 06, 2011 09:15 ET

Compass Petroleum Ltd. Closes Bought Deal Offering of Common Shares and Flow-Through Common Shares for Aggregate Gross Proceeds of $13.8 Million

CALGARY, ALBERTA--(Marketwire - May 6, 2011) -

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

Compass Petroleum Ltd. (the Corporation") (TSX VENTURE:CPO) announced today that it has closed its recently announced bought deal offering of common shares and flow-through common shares (the "Offering") for aggregate gross proceeds of $13,833,500. A total of 5,635,000 common shares and 800,000 flow-through common shares were sold at prices of $2.10 per share and $2.50 per share, respectively. The Offering was underwritten by a syndicate of underwriters led by Raymond James Ltd. and including Wellington West Capital Markets Inc. and Canaccord Genuity Corp. (collectively, the "Underwriters"). The common shares sold by the Corporation in connection with the Offering included 735,000 common shares that were distributed following the exercise of an over-allotment option granted to the Underwriters.

The Corporation intends to use the net proceeds of the Offering to: (i) repay outstanding indebtedness under the Corporation's existing credit facility; (ii) fund the exploration and development of the Corporation's west central Saskatchewan core area; and (iii) for general corporate purposes. In connection with the Offering the Corporation has agreed that it will incur and renounce to purchasers of flow-through common shares Canadian exploration expense ("CEE") in an amount equal to the issue price of those shares and will renounce such CEE effective December 31, 2011.

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.

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 natural 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 underwriting agreement entered into between the Corporation and the Underwriters, 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 the Corporation 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.

The securities offered have not been and will not be registered under the United States 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 requirement. This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there by any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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

    Compass Petroleum Ltd.
    Graham Barnes
    Chief Financial Officer
    (403) 261 1911
    info@compasspetroleum.com