Enterprise Energy Resources Ltd.

Enterprise Energy Resources Ltd.

May 17, 2011 08:10 ET

Enterprise Announces Terms of Previously Announced Financing

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 17, 2011) -


Enterprise Energy Resources Ltd. (the "Company") (TSX VENTURE:EER) is pleased to announce the preliminary terms of its previously announced financing.

The Company has entered into an agreement with GMP Securities L.P. to act as lead agent on behalf of a syndicate including Haywood Securities Inc. and Paradigm Capital Inc. (collectively, the "Agents") to undertake a best efforts private placement financing of subscription receipts ("Subscription Receipts") at a price to be agreed to by the Company and the Agents (the "Offering Price") for gross proceeds of up to $25,000,000 (the "Offering"). The Company has also granted the Agents an option (the "Option"), exercisable at any time up to two days prior to the closing of the Offering, to place additional Subscription Receipts at the Offering Price for additional gross proceeds to the Company of up to $5,000,000, for a total offering size of up to $30,000,000.

Each Subscription Receipt will be convertible for no additional consideration into one common share of the Company (a "Common Share") and one-half of one Common Share purchase warrant upon completion of the previously announced acquisition of Cerda Capital Corporation (the "Cerda Acquisition"). Each whole warrant will entitle the holder thereof to purchase one Common Share at a price per Common Share to be agreed to by the Company and the Agents for a period of 180 days following the closing of the Offering. If after 180 days following the closing of the Offering there remain outstanding Warrants, the respective holders will be entitled to purchase one Common Share at a price per Common Share to be agreed to by the Company and the Agents for an additional 180 days.

The closing of the Offering is expected to occur on or about June 22, 2011 and is subject to all necessary regulatory approvals.

The proceeds from the Offering will be used for the purchase consideration payable by the Company in connection with the Cerda Acquisition and the acquisition of Basin Petroleum Limited (See May 10, 2011 News Release) and for ongoing capital expenditures across the Company's core asset base in Montana and North Dakota and for general corporate purposes.

On the closing date of the Offering, the gross proceeds from the Offering will be delivered to and held by a licensed Canadian trust company or other escrow agent pending completion of the Cerda Acquisition.

The proceeds of the Offering will be released to the Company provided that the Cerda Acquisition is completed on or before July 15, 2011 (and provided further that a sufficient amount of the proceeds shall be released to the Company's legal counsel in trust in order to allow the Company to complete the Cerda Acquisition). If the Cerda Acquisition is not completed on or before July 15, 2011, the holders of Subscription Receipts will receive a cash payment equal to the Offering Price multiplied by the number of Subscription Receipts held, together with the earned interest thereon.

Securities issued under the Offering will be subject to a four month hold period beginning upon their issuance.


Geoff Carrington, President & CEO

This press release does not constitute an offer to purchase securities. The securities to be offered in the offering have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the benefit or account of, a U.S. person, except pursuant to an available exemption from such registration requirements.

Cautionary Note Regarding Forward-Looking Statements

Except for the statements of historical fact contained herein, the information presented constitutes "forward looking statements". Such forward-looking statements, including but not limited to those with respect to the closing of the Cerda Acquisition, the closing of the acquisition of Basin Petroleum Limited and the proposed financing, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, Cerda Capital Corporation or Basin Petroleum Limited to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Shares Outstanding: 21,706,782

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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