Exxel Energy Corp.
TSX VENTURE : EXX

Exxel Energy Corp.

August 09, 2007 23:24 ET

Exxel Energy Corp. Completes Private Placement and Acquisition of Undivided Working Interest in Approximately 390,000 Gross Acres in the Columbia River Basin

HOUSTON, TEXAS--(Marketwire - Aug. 9, 2007) - Cliff Adams, Chief Executive Officer, Exxel Energy Corp. (TSX VENTURE:EXX) ("Exxel" or the "Company") is pleased to announce that the Company has completed a private placement financing (the "Offering") brokered by Desjardins Securities Inc. (the "Agent") as announced on July 11th and July 30th, 2007. The Company offered 9,502,800 units at a price of Cdn$1.50 per unit, with each unit consisting of one common share and one-half of one common share purchase warrant and raised gross proceeds of Cdn$14,254,200.

Each whole warrant entitles the holder to purchase one additional common share of the Company at a price of Cdn$1.88 per share for a period of twenty-four months from the closing date. The Company will have the right to accelerate the expiry of the warrants after twelve months following closing, in the event that the weighted average trading price of the Company's common shares for any 15 consecutive trading days equals or exceeds Cdn$2.63 per common share.

The Company paid the Agents a cash fee of 5% of the gross proceeds raised by them and issued to the Agents, warrants entitling them to purchase that number of common shares of the Company that is 3% of the number of units sold pursuant to the Offering, exercisable for a period of twelve months from the closing date at a price of Cdn$1.50 per share. This financing transaction is subject to all necessary regulatory approvals and all securities issued will be subject to a 4 month hold period. In addition, the Company has agreed to pay the Agent an advisory fee of 0.5% of the gross proceeds in connection with the Acquisition (as hereinafter defined).

The Company has granted the Agent an Over-Allotment Option to purchase from the Company, up to an additional 15% of the Offering at any time up to 5:00p.m. (Toronto time) on the day which is 30 days following the closing date.

The net proceeds of the Offering were used to complete the acquisition, through Exxel's wholly owned subsidiary Exxel Energy (USA) Inc. of an undivided 12.5% working interest in leases covering approximately 390,000 gross (48,000 net) acres in the Columbia River Basin, including a 12.5% working interest in the Brown 7-24 well (the "Acquisition"), at a purchase price of approximately US$13.8 million.

Exxel Energy (USA) Inc. also entered into an Acquisition Exploration Agreement with EnCana Oil & Gas (USA) Inc., SWEPI LP and Netco Energy Inc. The Acquisition Exploration Agreement covers certain, specifically defined lands in the Columbia River Basin.

Cliff Adams, CEO of Exxel, commented "We are extremely pleased to have augmented our Columbia River Basin position with the completion of this acquisition. This addition provides us an opportunity to accelerate our exploration program in the basin as well as provides our shareholders with the ability to benefit from any near-term well results, with our interest in the Brown well. We remain very encouraged with the progress made in the basin to date and are excited about what we believe is world-class potential."

About Exxel Energy Corp.

Exxel, headquartered in Houston, is an independent oil and gas exploration and development company focused in the Columbia River Basin of Washington, the Piceance Basin of Colorado, the Great Basin of Nevada, the Greater Green Basin of Wyoming and the Williston Basin of North Dakota.

In the interests of providing Company shareholders and potential investors with information regarding the Company, including the Company's assessment of its and its subsidiaries' future plans and operations, certain statements included in this press release may constitute forward-looking information or forward-looking statements (collectively, "forward-looking statements"). All statements contained herein that are not clearly historical in nature are forward-looking, and the words "anticipate", "believe", "expect", "estimate" and similar expressions are generally intended to identify forward-looking statements. Similarly, forward-looking statements in this press release include, but are not limited to anticipated developments of the Company's drilling project in and the timing thereof, the Company's drilling project in and the timing thereof, capital investment levels and the allocation thereof, pipeline capacity, government royalty rates, reserve and resources estimates, the level of expenditures for compliance with environmental regulations, site restoration costs including abandonment and reclamation costs, exploration plans, acquisition and disposition plans including farmout plans, net cash flows, geographic expansion and plans for seismic surveys. In addition, please note that statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described can be profitably produced in the future.

Such statements represent the Company's internal projections, estimates or beliefs concerning, among other things, an outlook on the estimated amounts and timing of capital expenditures, anticipated future debt levels and incentive fees or revenues or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions. Actual events or results may differ materially. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company and the foregoing list of important factors is not exhaustive. These forward-looking statements are made as of the date hereof disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise. Company shareholders and potential investors should carefully consider the information contained in the Company's filings with Canadian securities administrators at www.sedar.com before making investment decisions with regard to the Company.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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