Primary Petroleum Corporation
TSX VENTURE : PIE
OTCQX : PETEF

Primary Petroleum Corporation

February 08, 2011 15:32 ET

Primary Petroleum Announces C$10,008,000 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwire - Feb. 8, 2011) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Primary Petroleum Corporation ("Primary" or the "Company") (TSX VENTURE:PIE)(OTCQX:PETEF) is pleased to announce that it has entered into an agreement with a syndicate of underwriters to acquire, on a "bought deal" basis, 13,900,000 common shares at a price of C$0.72 per common share for gross proceeds of C$10,008,000 (the "Offering"). The syndicate will be led by Macquarie Capital Markets Canada Ltd., and includes Casimir Capital Ltd. (the "Underwriters"). In addition, the Company has granted the Underwriters an over-allotment option (the "Over-allotment Option") to acquire up to an additional 2,085,000 common shares at a price of C$0.72 per common share. The Over-allotment Option is exercisable, in whole or in part, by the Underwriters, in their sole discretion, at any time up to 30 days after the Closing Date. If the Over-allotment Option is exercised in full, additional gross proceeds will be C$1,501,200 for total gross proceeds of C$11,509,200.

The Offering will be made pursuant to a short form prospectus to be filed by Primary with securities regulators in each of the provinces of Canada, other than the Province of Quebec. Closing of the Offering is expected to occur on or about February 28, 2011. The Offering is subject to receipt of any necessary regulatory and stock exchange approvals. The Company plans to use the proceeds raised to fund the Company's exploration and development of both its Montana and Alberta oil properties. In Montana, the Company will be advancing its Pondera Teton oil prospect in the Alberta Basin Bakken Fairway in western Montana by continuing its land acquisition strategy and executing a proprietary 3D seismic program to further delineate the prospects in advance of moving forward with a drilling program later in 2011. In addition, the Company will be funding its portion of a proprietary 3D seismic program on its Saturn oil prospect in Daniels County, Montana and may participate in drilling test wells pursuant to its Joint Venture with its Industry Partner (see press release December 17, 2010). In Alberta, the Company intends to commence drilling in Q2 this year, on its Long Coulee oil prospect located in southern Alberta. Remaining funds will be used for general corporate purposes. 

Mike Marandino, President and CEO of Primary Petroleum stated, "While we are still in discussions with Industry in seeking out the right joint venture partner, this capital raise provides us with a real opportunity to advance the Company's business plans on our own terms."

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state in the United States in which such offer, solicitation or sale would be unlawful. The securities referred to herein 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 registration requirements.

About Primary Petroleum Corporation: Primary is a junior oil and gas company engaged in exploration and development activities in Montana and Alberta. The Company's mandate is to continue to acquire strategic land positions of merit in the Sedimentary Basin of the Western United States and Canada and seek out qualified industry partners to exploit and develop them. The Company's public filings may be found at www.sedar.com. To find out more about Primary Petroleum visit our website at www.primarypetroleum.com

Investors are cautioned that this press release contains forward looking information. Such statements or information ("forward-looking statements") are generally identifiable by the terminology used such as "anticipate", "believe", "intend", "plan", "expect", "estimate", "budget", "outlook" or other similar words. More particularly, this press release contains statements concerning the closing of the Offering and the intended use of proceeds. The closing of the offering could be delayed if the Company is not able to obtain the necessary regulatory and stock exchange approvals on the planned timeline. In addition, the Underwriting Agreement contains terms which allow the Underwriters to terminate the financing upon the occurrence of certain stated events. 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 the Offering will not be completed within the anticipated time or at all. The intended use of proceeds and the timing of expenditures to develop the Company's oil properties will be impacted by a number of factors, including information obtained from the various activities conducted. Some of the factors may be beyond the control of the Company and the proceeds may not be spent as intended. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them because the Company 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 forward-looking statements contained in this press release are made as of the date hereof and the Company 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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