Spitfire Energy Ltd.
TSX VENTURE : SEL

Spitfire Energy Ltd.

December 19, 2006 11:39 ET

Spitfire Energy Announces $2.6 Million Private Placement Financing

CALGARY, ALBERTA--(CCNMatthews - Dec. 19, 2006) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Spitfire Energy Ltd. (TSX VENTURE:SEL) is pleased to announce it has reached an agreement to raise at least $2.6 million through the direct sale of securities to a publicly traded oil and gas company.

Spitfire has issued non-brokered private placement securities of Spitfire for net proceeds of $2.6 million, consisting of 2.6 million units at a price of $1.00 per unit. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant will entitle the holder to acquire one additional common share for $1.15 for a period ending December 19, 2008. Upon full exercise of the warrants, at the option of the subscriber, an additional 1.3 million common shares could be issued for additional proceeds of $1.495 million, potentially resulting in total proceeds of up to $4.1 million from the private placement.

The private placement has closed subject to final approval by the TSX Venture Exchange, conditional approval having been obtained on November 29, 2006. Spitfire will issue 2.6 million common shares and 1.3 million warrants, in addition to the 26,284,744 common shares currently issued and outstanding.

No fees will be payable by Spitfire in connection with this non-brokered private placement, allowing all the proceeds to be used for general working capital and exploiting the numerous prospects Spitfire has in its inventory.

The subscriber in the private placement is Harken Energy Corporation, a publicly traded company listed on the American Stock Exchange (AMEX:HEC). Based in Southlake, Texas, Harken is engaged in oil and gas exploration, development and production operations in the United States and internationally through its ownership in various companies. Harken was incorporated in 1973.

Harken strives to achieve favourable investment returns by diversifying holdings within the energy sector, balancing risk exposures and partnering with proven management teams with solid prospects.

Spitfire Energy Ltd. is a junior oil and gas company engaged in the exploration, development and production of natural gas and crude oil reserves. Spitfire's common shares trade on the TSX Venture Exchange under the symbol "SEL".

This press release contains forward-looking statements that are based on current expectations. There are a number of risks and uncertainties associated with the oil and gas industry that could cause actual results to differ materially from those anticipated.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the contents of this press release.

Contact Information

  • Spitfire Energy Ltd.
    Keith N. Chase
    President, Chief Executive Officer, Director
    (403) 205-3400 x 224
    or
    Spitfire Energy Ltd.
    Danny Zivkusic
    Chief Financial Officer
    (403) 205-3400 x 228
    or
    Spitfire Energy Ltd.
    Suite 1610, 311 6th Avenue S.W.
    Calgary, AB T2P 3H2