Desmarais Energy Corporation

February 10, 2012 12:52 ET

Desmarais Announces Issuance of Common Shares in Settlement of Debt and Implementation of Terms of Bankruptcy Proposal

CALGARY, ALBERTA--(Marketwire - Feb. 10, 2012) -


Desmarais Energy Corporation (TSX VENTURE:DES) (the "Corporation" or "Desmarais") announces that it has completed the issuance of an aggregate of 25,910,426 (the "Payment Shares") common shares of the Corporation ("Common Shares") at a deemed price of $0.08 per share, which Payment Shares were issued pursuant to Desmarais' previously announced proposal under the Bankruptcy and Insolvency Act (Canada) (the "Proposal") in satisfaction of approximately $2,072,830 of Desmarais' unsecured debt (the "Settled Debt"). The payment of all consideration to creditors under the Proposal was subject to the withholding by Desmarais of a levy, payable to the Office of the Superintendent of Bankruptcy (the "Superintendent") equal to 5% of the consideration paid. Accordingly, 5% of the Payment Shares, being approximately 1,295,520 Common Shares, have been issued by Desmarais to the Superintendent in payment of such levy, with the balance, an aggregate of approximately 24,614,900 Common Shares, being issued to creditors under the Proposal.

Desmarais has now fully implemented the terms of the Proposal made to its creditors.

The Corporation also announces that it has issued to Mr. James Long, the Corporation's former President and CEO, and currently a director of Desmarais, 4,452,082 Common Shares at a deemed price of $0.08 per share pursuant to the terms of the previously announced consulting agreement between the Corporation and Mr. Long.

Subsequent to the issuance of the Payment Shares in satisfaction of the Settled Debt and issuance of Common Shares to Mr. Long, Desmarais has approximately $2,000,000 of secured debt and approximately 57.4 million Common Shares outstanding.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction. The common shares of Desmarais will not be and have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States, or to a U.S. person, absent registration or applicable exemption therefrom.

Reader Advisory: The press release may contain certain forward looking statements which may include plans, expectations, forecasts, projections, guidance or other statements that are not statements of fact, including without limiting the generality of the foregoing, the status and amount of Desmarais' secured debt and the pro-forma financial position of Desmarais subsequent to its discharge from bankruptcy. Although Desmarais believes that the expectations reflected in such forward looking statements are reasonable, it cannot give any assurance that such expectations will prove to be correct. As such, the future plans and objectives of Desmarais are forward looking statements that involve risks and uncertainties that may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in such statements. The foregoing list of risk factors is not exhaustive. Additional information on risk factors is included in other public documents available under Desmarais' profile on SEDAR. Although Desmarais has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in the forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. In making its forward looking statements, Desmarais used, among others, the following material factors or assumptions to develop forward looking information enumerated above: management's reasonable estimates with regard to debt levels and working capital. Desmarais' forward looking statements are expressly qualified in their entirety by this cautionary statement. Unless otherwise required by applicable securities laws, Desmarais does not intend, nor does it undertake any obligation, to update or review any forward looking statements to reflect subsequent information, events, results or circumstances or otherwise.

Neither 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.

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