Exall Energy Corporation

Exall Energy Corporation

January 05, 2011 16:11 ET

Exall Energy Announces $10.0 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - Jan. 5, 2011) -


Exall Energy Corporation (TSX:EE) ("Exall" or the "Company") is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Dundee Securities Corporation and including Clarus Securities Inc., Stonecap Securities Inc., and D&D Securities Inc. (the "Underwriters") pursuant to which they have agreed to purchase for resale to the public, on a bought deal basis, 4,762,000 common shares of Exall at a price of $2.10 per common share (the "Offering Price") resulting in gross proceeds of $10,000,200 (the "Offering"). Exall has also granted the underwriters an over allotment option, exercisable in whole or in part, for a period commencing at closing of the Offering and ending 30 days following closing of the Offering, to purchase an additional 714,300 common shares at the same Offering price which, if exercised, would increase the total gross proceeds to $11,500,230.

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 will be a bought underwritten public issue in all provinces of Canada (except Quebec) by way of short form prospectus. The offering may also be offered for sale as a private placement to Qualified Institutional Buyers in the United States, pursuant to the registration exemptions provided by Rule 144A of the U.S. Securities Act of 1933. This Offering is subject to certain conditions including normal regulatory approvals and specifically, the approval of the TSX and applicable securities regulatory authorities. Closing is anticipated to occur on or about February 1, 2011.

The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, or any state securities law and may not be offered or sold in the United States absent registration or applicable exemption from those registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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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