Desco Energy Ltd.

November 11, 2005 09:30 ET

Desco Energy Ltd. - Status of Potential Qualifying Transaction

CALGARY, ALBERTA--(CCNMatthews - Nov. 11, 2005) - Desco Energy Ltd. (TSX VENTURE:DSE.P) (the "Corporation") is continuing discussions with Arcan Resources Ltd. ("Arcan"), a private corporation incorporated under the Business Corporation's Act (Alberta), with respect to entering into an agreement in principle with Arcan. If entered into, the agreement in principle is expected to provide for the Corporation and Arcan to enter into one farmout agreement and two participation agreements which, collectively, are anticipated to comprise the Corporation's "Qualifying Transaction" within the meaning of the TSX Venture Exchange (the "Exchange") Policy 2.4. If the foregoing agreements are entered into, it is anticipated that the three well drilling program contemplated therein will comprise a "satisfactorily diversified exploration program" within the meaning of the Category 3 requirements for a Tier 2 issuer as set out in Exchange Policy 2.1. The Corporation anticipates that its initial financial commitments in respect of the potential Qualifying Transaction will be in the approximate amount of $2,000,000. The Corporation intends to provide financing for the potential Qualifying Transaction by completing a private placement of common shares of the Corporation subject to the approval of and in accordance with the policies of the Exchange. No assurance can be given that an agreement in principle will be reached between the Corporation and Arcan.

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

Contact Information

  • Desco Energy Ltd.
    Robert J. Dales
    (403) 803-3884