Cypress Hills Resource Corp.
TSX VENTURE : CHS

Cypress Hills Resource Corp.

March 31, 2006 16:01 ET

Cypress Hills Announces Casing of First Hotchkiss Well and the First Closing of Increased Private Placement

CALGARY, ALBERTA--(CCNMatthews - March 31, 2006) - CYPRESS HILLS RESOURCE CORP. (TSX VENTURE:CHS) ("Cypress Hills" or the "Company") announces that the operator has drilled and cased the first test well on our six section block of Alberta Crown lands in the Hotchkiss area of Alberta. Cypress Hills is paying 25 percent of the drilling, completion, tie-in and/or abandonment costs of this first well to earn a 18.75% working interest in the section and has an 18.75% working interest in the remaining five sections. A completion program is presently being developed and further work will take place after spring breakup.

The Company also wishes to announce that it has closed the first tranche of its previously announced non-brokered private placement equity offering which has been increased in size from 3,000,000 units to 3,152,646 units at $0.50 per unit for gross proceeds of $1,576,323 Cdn. Each unit is comprised of one common share, one "flow-through" common share and one-half of a non-transferable common share purchase warrant of the Company. Each whole warrant entitles the holder to purchase one additional common share for $0.30 for a period of 12 months from date of closing. At the first closing, a total of 2,752,646 units were issued for gross proceeds of $1,376,323. Securities sold under the first closing of this offering will have a hold period until August 1, 2006. The Company paid a total of $10,150 and issued 40,600 warrants, entitling the holder to purchase one additional common share for $0.30 for a period of 12 months from date of closing, as a finder's fee to certain eligible persons in connection with the sale of the units.

The proceeds of the private placement will be used (a) to fund the further evaluation and completion of the Eagle Ford formation identified in the recently drilled Cypress Hills 604-1 well on the Chittim Ranch in Maverick and Zaval Counties, Texas, (b) for the drilling and completion of the initial testwell in the Hotchkiss area of Alberta, (C) for additional exploration projects, or (d) for working capital.

Additional information on Cypress Hills and its projects can be found at www.sedar.com.

This news release does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. The common shares of the Corporation will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

CAUTIONARY STATEMENT:

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This news release includes certain "forward-looking statements". All statements other than statements of historical fact included in this news release, including, without limitation, statements regarding size of offering, use of proceeds, and future plans and objectives of Cypress Hills, are forward looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Cypress Hills' expectations are exploration risks (including unforeseen well drilling results or events), production risks and pricing risks detailed herein and from time to time in other filings made by Cypress Hills with securities regulators.

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

Contact Information

  • Cypress Hills Resource Corp.
    Ted J. Fostey
    President
    (403) 265-7663
    or
    Cypress Hills Resource Corp.
    Brian E. Bayley
    Director
    (604) 689-1428