Rock Energy Inc.

Rock Energy Inc.

May 19, 2011 08:57 ET

Rock Energy Inc. Announces Closing of Bought Deal Common Share and Flow-Through Common Share Financing

CALGARY, ALBERTA--(Marketwire - May 19, 2011) - Rock Energy Inc. ("Rock" or the "Company") (TSX:RE) is pleased to announce that it has closed its previously announced bought deal financing of 4,238,100 common shares (including 238,100 common shares issued pursuant to the exercise in part of the over-allotment option granted to the underwriters) at an issue price of $5.00 per common share and 1,640,000 common shares issued on a "flow-through" basis at an issue price of $6.10 per flow-through common share for gross proceeds to Rock of $31,194,500 (the "Offering") through a syndicate of underwriters co-led by Cormark Securities Inc. and Wellington West Capital Markets Inc. and which included FirstEnergy Capital Corp., Mackie Research Capital Corporation, AltaCorp Capital Inc., Dundee Securities Ltd., National Bank Financial Inc. and Scotia Capital Inc.

The net proceeds of the Offering are expected to initially be used by the Company to reduce outstanding indebtedness under the Company's credit facility, thereby freeing up borrowing capacity which is expected to be redrawn and applied to fund the Company's expanded capital expenditure program, including to fund Canadian exploration expense, and for general corporate purposes. The Company's expanded capital program includes capital being allocated towards accelerating the Company's Montney resource project at Elmworth in West Central Alberta. The Company plans to drill a 100% working interest horizontal well in North Elmworth, a 100% working interest horizontal well in South Elmworth, three 100% vertical stratigraphic test wells in South Elmworth and incur initial expenditures for related pipeline and processing facilities.

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 and forward-looking information within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). Specifically, this press release contains forward-looking statements relating to the use of proceeds of the Offering and the renouncing of Canadian exploration expenses. The forward-looking statements are based on certain key expectations and assumptions made by Rock, including assumptions concerning the state of the economy and the exploration and production business, which expectations and assumptions management of Rock believes to be reasonable at this time. Although Rock believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable at the date of this press release, undue reliance should not be placed on the forward-looking statements and information as Rock 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 Rock undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • Rock Energy Inc.
    Allen J. Bey
    Chief Executive Officer
    (403) 218-4380

    Rock Energy Inc.
    John H. Van de Pol
    President & Chief Financial Officer
    (403) 218-4380