Iteration Energy Ltd.
TSX : ITX

Iteration Energy Ltd.

April 14, 2009 08:46 ET

Iteration Energy Ltd. Announces $50 Million Bought Deal Financing and Provides Credit Facility Update

CALGARY, ALBERTA--(Marketwire - April 14, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES

Iteration Energy Ltd. ("Iteration" or the "Company") (TSX:ITX) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Cormark Securities Inc. pursuant to which the underwriters have agreed to purchase 39,100,000 common shares ("Common Shares") at an issue price of $1.28 per Common Share by way of prospectus offering for gross proceeds to Iteration of approximately $50 million (the "Offering").

Iteration has also granted the underwriters an option (the "Over-Allotment Option") to purchase up to an additional 5,865,000 Common Shares to cover over-allotment, if any, for additional gross proceeds of up to approximately $7.5 million. The Over-Allotment Option is exercisable in whole or in part for a period of 30 days following closing of the Offering.

The Offering is scheduled to close on or about May 6, 2009 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. Proceeds of the Offering will be used to fund Iteration's 2009 capital program, reduce current bank indebtedness and for general corporate purposes. The Common Shares will be offered in certain provinces of Canada by way of a short form prospectus.

Credit Facility Update

Iteration is currently in the process of negotiating a renewal of its credit facilities with a syndicate of four major Canadian chartered banks, which facility will mature on April 30, 2009. The Company anticipates that it will finalize a borrowing base credit facility of $260 million in addition to a $25 million supplemental credit facility. The supplemental credit facility is expected to be subject to repayment in October 2009. The Company estimates that prior to the equity financing its current net debt, including working capital deficit, is approximately $285 million.

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

ADVISORY: This press release contains forward looking statements, including statements concerning completion of the Offering, renewal of the credit facility, drilling plans, capital programs, debt, closing date of the Offering and the anticipated use of the net proceeds of the Offering. Although Iteration believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Iteration can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The closing of the offering could be delayed if Iteration is not able to obtain the necessary regulatory and stock exchange approvals on the timelines it has planned. The offering will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied. Accordingly, there is a risk that any proposed acquisition or offering will not be completed within the anticipated time or at all. The intended use of the net proceeds of the offering by Iteration might change if the board of directors of Iteration determines that it would be in the best interests of Iteration to deploy the proceeds for some other purpose. There can be no assurance that the credit facility will be renewed or, if renewed, on terms satisfactory to the Company or on terms contemplated in the press release. The forward-looking statements contained in this press release are based on the Company's current beliefs as well as assumptions made by, and information currently available to, the Corporation. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that forward-looking statements will not be achieved. These factors may be found under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2008, a copy of which is available at www.sedar.com.

The forward looking statements contained in this press release are made as of the date hereof and Iteration undertakes no obligations to update publicly or revise any forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.

Contact Information

  • Iteration Energy Ltd.
    Brian Illing
    President and Chief Executive Officer
    (403) 261-6883