Dual Exploration Inc.
TSX : DLX

Dual Exploration Inc.

July 25, 2005 09:05 ET

Dual Exploration Inc. Announces $8 Million Private Company Acquisition and $9 Million Bought Deal Financing

CALGARY, ALBERTA--(CCNMatthews - July 25, 2005) -

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

Dual Exploration Inc. ("Dual") (TSX:DLX) is pleased to announce that it has entered into an agreement to acquire a private company (the "Acquisition") with 787 mboe of proved plus probable reserves and more than 300 boepd of production for $8 million in cash.

Dual intends to fund the Acquisition with the proceeds of a $9 million "bought deal" financing ("the Offering") entered into with a syndicate of underwriters. The Acquisition is scheduled to close on or about August 12, 2005 and the Offering is scheduled to close on or about August 11, 2005 and are subject to normal approvals by the Toronto Stock Exchange.

The Acquisition is accretive to Dual in several key measures including reserves, production and cashflow. The producing assets being acquired under the Acquisition are located principally in the Hays/Enchant area of south central Alberta, but also include minor production in Prevo, Bow Island and other areas of Alberta. Overall, approximately 75% of the production comes from the Hays/Enchant area, and the production is weighted approximately 80% to oil. Based on the independent reserve evaluation effective April 1, 2005, Dual's proved reserves and proved plus probable reserves are expected to increase by approximately 332 mboe and 787 mboe respectively at the closing of the transaction. The assets to be acquired include over 12,000 net acres of undeveloped land and processing facilities in the Hays/Enchant area.

Pursuant to the Offering, the underwriters, co-led by FirstEnergy Capital Corp. and Clarus Securities Inc., have agreed to sell on a "bought deal" basis by means of a private placement 5.1 million subscription receipts of Dual at a price of $1.75 per subscription receipt for aggregate proceeds of $9 million. Each subscription receipt will entitle the holder to acquire one common share of Dual for no additional consideration upon completion of the Acquisition. Certain insiders intend on participating in the Offering up to a maximum of $2 million or 22% of the Offering. Dual currently has approximately 21.9 million common shares outstanding. After completion of the Offering Dual will have approximately 27.0 million common shares outstanding.

Dual Exploration Inc. is an aggressive junior oil and gas company engaged in the exploration for, and development and production of natural gas and oil reserves in Western Canada and the greater Mediterranean area. Dual's common shares trade on the Toronto Stock Exchange under the symbol "DLX".

Forward-Looking Statements

Certain information set forth in this document, including managements' assessment of the future plans and operations of Dual and the benefits of the proposed Acquisition, contains forward looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Dual control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward looking statements. The actual results, performance or achievement of Dual could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits that Dual will derive therefrom. Dual disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Boe's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The common shares of Dual 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 applicable exemption from the registration requirements.

Contact Information

  • Dual Exploration Inc.
    Marty Cheyne
    President
    (403) 233-7778 ext. 226
    or
    Dual Exploration Inc.
    Gerry Gilewicz
    Chief Financial Officer
    (403) 233-7778 ext. 227
    Website: www.dualexp.com