Sierra Vista Energy Ltd.
TSX VENTURE : SVR.A
TSX VENTURE : SVR.B

Sierra Vista Energy Ltd.

October 24, 2006 09:15 ET

Sierra Vista Announces $10 Million Equity Financing

CALGARY, ALBERTA--(CCNMatthews - Oct. 24, 2006) -

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

Sierra Vista Energy Ltd., (TSX VENTURE:SVR.A) (TSX VENTURE:SVR.B) ("Sierra Vista" or the "Corporation"), announced today that it has entered into an agreement with a syndicate of Agents led by RBC Capital Markets and including Dundee Securities Corporation (collectively the "Agents") for an offering, on a best efforts basis, by way of a short form prospectus, of $7 million of Common Units and $3 million of class A common shares (the "Flow-through Shares"), on a Canadian development expenditure flow-through basis, for total anticipated proceeds of $10 million (the "Offering"). Each Common Unit will consist of one class A common share and one half of a share purchase warrant where each whole warrant will entitle the holder to acquire an additional class A common share until December 31, 2007. The Corporation has also granted the Agents an over-allotment option, exercisable within 30 days following the closing of the offering, to purchase up to an additional 15% of the Offering of Common Units at the offering price to cover over-allotments. Sierra Vista intends to file a preliminary short form prospectus with the appropriate securities regulatory authorities in each province of Canada, except Quebec. It is expected that certain officers and directors of the Corporation will participate in the Common Unit portion of the Offering.

The issue price for the Common Units (including the warrant exercise price) and Flow-through Shares, along with the specific numbers of securities to be issued, will be determined following the marketing of the Offering, with closing, subject to regulatory approval, anticipated to be in mid November 2006.

The Flow-through Share proceeds will be used to incur Canadian Development Expenses which will be renounced to subscribers in the 2006 taxation year.

The balance of the net proceeds from the Offering will be used to fund the Corporation's ongoing development drilling activities in its core areas of the Peace River Arch, Alberta and for general corporate purposes.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction. None of the securities comprising the Common Units or the Flow-through Shares have been nor will they be registered under the United States Securities Act of 1933, and they may not be offered or sold in the United States absent registration or an exemption from registration.

Forward Looking Statements

Certain of the statements contained herein including, without limitation, financial and business prospects and financial outlooks may be forward-looking statements which reflect management's expectations regarding future plans and intentions, growth, performance and business prospects and opportunities.

In particular, this press release contains forward-looking statements pertaining to the Corporation's expectations of raising additional capital and completing the Offering.

The Corporation's actual results could differ materially from those anticipated in these forward-looking statements. The Corporation is subject to the risk factors associated with the oil and gas industry and there can be no assurance that the Corporation will complete the Offering.

Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", continue" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on uncertainties. Although the forward-looking statements contained within this press release are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances unless required under securities laws.


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

Contact Information

  • Sierra Vista Energy Ltd.
    Mr. Mark Malouin
    President & CEO
    (403) 265-9393 ext 201
    (403) 265-9224 (FAX)
    or
    Sierra Vista Energy Ltd.
    Mr. Bruce Stewart
    Chief Financial Officer
    (403) 265-9393 ext 205
    (403) 265-9224 (FAX)
    or
    Sierra Vista Energy Ltd.
    Suite 850, 101-6th Avenue SW
    Calgary, Alberta T2P 3P4