KDC Energy Ltd.

December 22, 2010 17:50 ET

KDC Closes Private Placement and Asset Acquisition

CALGARY, ALBERTA--(Marketwire - Dec. 22, 2010) - KDC Energy Ltd. ("KDC" or the "Corporation") is pleased to announce that it closed an oil and gas asset acquisition in the Southern Alberta property on December 20, 2010. The assets include 11.7 net undeveloped sections of land, 27 gross producing working interest wells (8.7 net), and several royalty interest wells. The purchase price was $7.8 million, effective October 1, 2010, with current production of approximately 140 boe/d, 89% weighted to oil.

The Corporation also closed a subordinated debenture and common share financing with Mackie Research Capital Corporation (the "Agent") acting as agent, whereby the Corporation has issued and sold 857,615,843 common shares in the capital of the Corporation (the "Common Shares") for gross proceeds of approximately $25,900 and $2,564,100 principal amount of 5% subordinated debentures (the "Debentures") for aggregate gross proceeds of $2,590,000 on December 16, 2010.

The Corporation also amended its existing credit facility with Alberta Treasury Branches to increase its existing operating credit facility from $3,000,000 to $7,700,000.

All reference to dollar values are in Canadian funds.

Natural gas has been converted to a barrel of oil equivalent (Boe) using 6,000 cubic feet (6 Mcf) of natural gas equal to one barrel of oil (6:1), unless otherwise stated. The Boe conversion ratio of 6 Mcf to 1 Bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore Boe's may be misleading if used in isolation.

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