Exall Energy Corporation
TSX : EE

Exall Energy Corporation

January 11, 2011 08:07 ET

Exall Energy Announces $10 Million Private Placement of Special Warrants

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2011) -

NOT FOR DISTRIBUTION TO US NEWSWIRE SERVICES OR FOR DISSEMINATION TO THE UNITED STATES

Exall Energy Corporation (TSX:EE) ("Exall" or the "Company") announces that due to regulatory matters it has revised the terms of the bought deal, short-form prospectus offering announced on January 5, 2011. Under the terms of the revised offering, a syndicate of underwriters led by Dundee Securities Corporation and including Clarus Securities Inc., Stonecap Securities Inc. and D&D Securities Inc. (collectively, the "Underwriters") has agreed to purchase, on a bought deal basis, 5,000,000 special warrants ("Special Warrants") of Exall at a price of $2.00 per Special Warrant for aggregate gross proceeds of $10,000,000 (the "Offering"). Exall has also granted the Underwriters an option to purchase up to an additional 750,000 Special Warrants at the same offering price which, if exercised in full, would increase the total gross proceeds to $11,500,000.

Each Special Warrant will entitle the holder thereof to receive one common share of the Company on the exercise or deemed exercise of the Special Warrants. The Special Warrants will be exercisable by the holder at any time after the closing of the Offering for no additional consideration and all unexercised Special Warrants will be deemed to be exercised on the earlier of (a) four months and a day following the closing of the Offering, and (b) the first business day after a receipt is issued by the securities regulatory authorities in each of the provinces of Canada, except Quebec, for a final prospectus qualifying the common shares to be issued upon the exercise of the Special Warrants. The Company shall use its reasonable best efforts to obtain such receipt on or before the day that is two business days from the closing of the Offering (the "Qualification Deadline"). Until the receipt is issued for such prospectus, the Special Warrants as well as the common shares issuable upon exercise thereof will be subject to a four month hold period under applicable Canadian securities laws. In the event the final receipt is not obtained from the applicable securities regulatory authorities by the Qualification Deadline, the holders of Special Warrants shall be entitled to receive, for no additional consideration, upon exercise or deemed exercise of their respective Special Warrants, 1.1 common shares for each Special Warrant held.

The net proceeds from the Offering will be used to expand and accelerate Exall's capital program for the development of the Company's Gilwood light oil exploration and development program in Mitsue, Alberta, to reduce outstanding bank debt and for general corporate purposes.

The Offering is expected to close on February 1, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.

About Exall

Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, British Columbia and Texas. Exall is currently developing a new oil discovery in north-central Alberta.

Exall has 54,031,169 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the forward-looking statements relating to the closing of the offering, the use of proceeds from the Offering, along with those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

Please visit Exall Energy's website at: www.exall.com.

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