SignalEnergy Inc.

December 02, 2005 23:59 ET

SignalEnergy Inc. (TSX-SGI) announces closing of private placement and operations update

CALGARY--(CCNMatthews - Dec. 2) -


SignalEnergy Inc. ("Signal" or the "Company") ("SGI - TSX") is pleased to announce the closing of the previously announced private placement offering and to provide shareholders with an update of ongoing operations.

Signal has closed the private placement offering of 2,000,000 common shares of the Company on a flow-through basis at a price of $1.52 per share, for gross proceeds of $3,040,000, as announced on November 18, 2005. Each flow-through share will entitle the investor to the tax benefits of the qualifying Canadian exploration expenses incurred by the Company, which will be "flowed-through" to the investor. The proceeds from the offering will be used to fund Signal's exploration and development program. The private placement is subject to receipt of all necessary regulatory approvals.

The Company's field operations continue to progress during the fourth quarter with activity focused in Redwater, Carrot Creek and Chigwell-Bashaw. In addition, the high-impact well in Elmworth is currently drilling ahead at 2,560 m and is expected to reach final depth by December 9th.

Signal has successfully drilled and cased eight wells of a planned ten well program to develop the Ellerslie oil pool in Redwater so far in the fourth quarter. One drilling rig remains at work in the field to drill the final two wells of the development program. Completion operations are underway on four of the eight wells cased to date plus one cased hole re-entry operation with results expected by early next week. Pending continued good weather and crew availability Signal is expecting nine of the eleven wells to be placed on production prior to year-end.

In Carrot Creek three new wells are expected to be on production before year-end to complete a successful development program in this area. The activity in 2005 has set-up several potential follow-up locations to be developed in 2006. Finally in Chigwell-Bashaw the completion and tie-in programs of the Company's CBM development has results in seven successful gas wells at an average 31% working interest.

Caution to Reader

This news release contains forward-looking statements and the reader is cautioned not to place undue reliance on these statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predications, forecasts, projections and other forward-looking statements will not occur.

The common shares of Signal have not and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold in the United States or to any U.S person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.

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