Pacific Rodera Energy Inc.
TSX VENTURE : PRD

Pacific Rodera Energy Inc.

December 05, 2006 12:47 ET

Pacific Rodera Energy Announces Closing of $2.506 Million Private Placement

CALGARY, ALBERTA--(CCNMatthews - Dec. 5, 2006) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW.

Pacific Rodera Energy Inc. (TSX VENTURE:PRD) ("Pacific Rodera" or the "Company") is pleased to announce further to its press release dated November 22, 2006 that it has completed the sale, on a private placement basis, of 8,831,250 units (the "Units") of the Company to Mr. Michael Greenwood for gross proceeds of $2.506 Million. It is expected that an additional 3,768,750 Units will be sold to Mr. Greenwood and his nominees by no later than January 6, 2007 for additional gross proceeds of approximately $1.206 Million.

Proceeds from the private placements will be used to fund Pacific Rodera's drilling program in British Columbia and the North West Territories.

Details of the Private Placement

The aggregate number of Units to be issued in connection with the private placements will consist of 11,000,000 Units at a price of $0.32 per Unit consisting of one flow-through common share and one half of one common share purchase warrant of the Company and 600,000 Units at a price of $0.32 per Unit consisting of one non flow-through common share and one half of one common share purchase warrant of the Company. Each whole common share purchase warrant entitles the holder to purchase one additional common share of the Company at an exercise price of $0.40 per common share for a period of two years following closing. The securities issued in these private placements will be subject to a four-month hold period.

Please see the Company's press release dated November 22, 2006 for further details of the private placement.

Upon completion of the private placements, Mr. Greenwood will hold approximately 19.0% of the common shares of the Company. As such, the policies of the TSX Venture Exchange require that the Company obtain the majority approval of the shareholders of the Company for the private placement. Pending receipt of such approval, Mr. Greenwood will be prohibited from voting that number of common shares held by him which exceeds the number of common shares of the Company held by the directors and officers of the Company (excluding Mr. Greenwood and his nominees). Mr. Greenwood may elect to extend these voting arrangements until the end of the applicable tax year relevant to the Company's flow-through obligations associated with the Units comprised of flow-through common shares.

The TSX Venture Exchange has conditionally accepted the private placement.

Incentive Stock Options

The Company also wishes to announce further to its press release dated November 22, 2006 that it has granted 3,225,000 stock options under its stock option plan exercisable at $0.39 per share for a period of five years to certain directors, officers, employees and consultants of the Company. A portion of these incentive stock options will be subject to disinterested shareholder approval at the Company's next shareholder meeting.

Trutch Property Operations Update

In Trutch, British Columbia, the third quarter marked the first full quarter of production from the Trutch facility.

The Company's share of the production from the five wells currently tied into the facility averaged 73 boe/d in the third quarter. Subsequent to the completion of the all-weather road in late September, two additional gas wells that were drilled in the first quarter were also tied in. These new wells added incremental net production to the Company of 40 boe/d by the end of November. With the now increased volumes and the road access, it is expected that the unit operating cost will considerably decrease over the next few quarters.

Recent industry activity immediately to the north of the Company's Trutch property further confirms the northern extent of the Halfway pool. With the Good Engineering Practice approval now in place, ultimate pool development anticipates drilling up to four wells per section, which provides a 70 well opportunity inventory. The operator has begun a three well development program in the fourth quarter at Trutch. One of these wells, B-36-I, has been drilled and cased and is awaiting results from production testing. The second well, D-35-I, has commenced its drill program and upon completion results will be released.

A boe conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain disclosure in this release, including management's assessment of Pacific Rodera's plans and projects, constitutes forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Pacific Rodera's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on forward-looking statements.

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

Contact Information

  • Pacific Rodera Energy Inc.
    David J.L. Williams
    President
    (403) 234-0501
    (403) 234-0511 (FAX)
    or
    Pacific Rodera Energy Inc.
    Suite 240, 600 - 6th Avenue SW
    Calgary, AB T2P 0S5
    Email: info@pacrodera.com
    Website: www.pacrodera.com