Midway Energy Ltd.
TSX : MEL

Midway Energy Ltd.

February 22, 2011 20:21 ET

Midway Announces Closing of Garrington Acquisition and Increased Credit Facility

CALGARY, ALBERTA--(Marketwire - Feb. 22, 2011) - Midway Energy Ltd. ("Midway" or the " Company") (TSX:MEL) is pleased to announce that it has closed its previously announced acquisition of additional Cardium lands and production in the Garrington area of Alberta (the "Acquisition").

The total consideration paid for the Acquisition was $20 million in cash, before closing adjustments, and the issuance of 2 million special warrants of Midway. Each special warrant is exercisable for one common share of Midway.

The Acquisition will add approximately 280 boe per day of Cardium oil and solution gas production, all of which is currently operated by Midway, and will add an additional 8 net Cardium "A" Sand drilling locations as well as additional Cardium "B" Sand locations. The Acquisition increases Midway's total Cardium land holdings in the Garrington Cardium trend to 46.3 net sections and gives Midway 100% ownership of its key facilities in Garrington and 100% ownership in 38.75 of its sections of Cardium rights.

Increased Credit Facility

Midway also announces that its lender has increased the Company's credit facility from $55 million to $75 million. Based on the lender's review of the borrowing base it is expected that the credit facility will be further increased when syndication of the credit facility is completed.

Information Regarding Midway

Midway Energy Ltd. is a public oil and gas exploration and development company, located in Calgary, Alberta with operations pursued in Alberta. Midway currently trades on the Toront o Stock Exchange (TSX) under the Symbol "MEL".

Forward-looking Statements

This news release contains forward-looking statements relating to the Company's plans and other aspects of the Company's anticipated future operations, management focus, strategies, financial and operating results and business opportunities. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "goal", "plan", "intend" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future. In particular, this press release contains forward-looking statements relating, but not limited to, the expected benefits to be derived from the Acquisition and the anticipated future increase in the Company's credit facility.

These forward-looking statements are based on various assumptions including expectations regarding the properties acquired; the Company's ability to syndicate its credit facility on terms acceptable to it, the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; the timing, location and extent of future drilling operations; estimates of future production and operating costs; the state of the economy and the exploration and production business; results of operations; performance; business prospects and opportunities; future exchange and interest rates, Midway's ability to obtain equipment in a timely manner to carry out development activities, impact of increasing competition, ability to market oil and natural gas successfully and the ability of Midway to access capital. While Midway considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodity prices; currency fluctuations; imprecision of reserve estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions in Canada, the U.S. and globally; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Midway believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward-looking statements. The forward-looking statements contained in this news release are made as the date of this new release and the company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

51-101 Advisory

In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities ("NI 51- 101"), natural gas volumes have been converted to barrels of oil equivalent using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Readers are cautioned that the term "boe" may be misleading, particularly if used in isolation.

Contact Information

  • Midway Energy Ltd.
    Scott Ratushny
    Chairman and Chief Executive Officer
    (403) 216-2705
    or
    Midway Energy Ltd.
    Douglas K. Smith
    Chief Financial Officer
    (403) 216-2705
    info@midwayenergy.com