Fairquest Energy Limited

Fairquest Energy Limited

September 22, 2005 08:12 ET

Fairquest Announces $23 Million Bought Deal Private Placement Financing

CALGARY, ALBERTA--(CCNMatthews - Sept. 22, 2005) -


Fairquest Energy Limited ("Fairquest") (TSX:FQE) is pleased to announce that it has entered into a private placement common share and flow-through common share financing agreement, on a bought deal basis, with an underwriting syndicate led by Sprott Securities Inc. and including GMP Securities Ltd., Canaccord Capital Corporation, Raymond James Ltd. and Peters & Co. Limited. Fairquest will issue 1,000,000 common shares and 1,000,000 flow-through common shares at a price of $10.00 per common share and $13.00 per flow-through common share for total gross proceeds of $23 million, pursuant to certain exemptions from prospectus requirements.

The private placement financing is scheduled to close on October 12, 2005 and is subject to customary conditions including regulatory approval.

The proceeds of the financing will be used to expand Fairquest's capital program for the remainder of 2005 and the first quarter of 2006. The $20 million increase in the capital program will be directed to additional development drilling at Columbia/Harlech and new exploration expenditures in the Deep Basin in Alberta. Flow-through expenditures will be renounced to subscribers for the flow through shares effective on or before December 31, 2005.

Fairquest is a Calgary based, junior oil and natural gas exploration and development company headquartered in Calgary, Alberta, Canada that was created on the reorganization of Fairborne Energy Ltd. completed on June 1, 2005. Its common shares trade on the Toronto Stock Exchange under the symbol "FQE".

The common shares offered have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. 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.

Forward Looking Statements - Certain information regarding Fairquest Energy Limited (the "Company") set forth in this document, including management's assessment of the Company's future plans and operations, contains forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the Company's 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 producers, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom.

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