Desmarais Energy Corporation

September 26, 2011 23:12 ET

Desmarais Files a Notice of Intention Under the Bankruptcy and Insolvency Act

CALGARY, ALBERTA--(Marketwire - Sept. 26, 2011) - Desmarais Energy Corporation (TSX VENTURE:DES) (the "Corporation" or "Desmarais") announces that today it has filed with the Office of the Superintendent of Bankruptcy a Notice of Intention to File a Proposal under the Bankruptcy and Insolvency Act (Canada) ("BIA"). As a consequence of such filing, any and all recourses of the Corporation's creditors are stayed for an initial period of thirty (30) days. Desmarais has taken this action in light of recent enforcement actions taken by its largest unsecured creditor, whereby that creditor has seized Desmarais' cash balances, leaving Desmarais unable to meet its day to day obligations as they come due. Although this enforcement action and the underlying claim of the unsecured creditor is disputed by Desmarais, the Corporation has taken this action under the BIA as the most expeditious and economical manner of addressing the interests of its creditors and allowing it to carry on its operations. Desmarais expects to file a formal proposal under the BIA, setting forth a comprehensive plan for payment to Desmarais' creditors in due course. This filing has been taken by Desmarais with the full support of its secured creditor. The trustee named in the notice of intention is Hardie & Kelly Inc., of Calgary, Alberta.

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, meeting the terms, conditions and approval requirements under the BIA, the effect of the notice of intention under the BIA and the Corporation's intentions to prepare and file a comprehensive creditor plan. 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. The effect of the stay of creditors and the formal proposal are subject to a number of conditions which Desmarais cannot give any assurance that such conditions will be met on a timely basis, or if at all, as certain of the conditions are in the control of other parties. 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 a forward looking information enumerated above: the protections under the BIA are available to Desmarais and Desmarais will be able to formulate a suitable creditor proposal in the timelines required under the BIA. 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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