November 17, 2005 12:13 ET

Tuscany Announces Planned $3.0 Million Financing

CALGARY, ALBERTA--(CCNMatthews - Nov. 17, 2005) - Tuscany Energy Ltd. (TSX VENTURE:TUS) announces that it has entered into an agreement with Blackmont Capital Inc., as Agent, for the issuance of up to 4,000,000 common shares on a flow-through basis at a price of $0.50 per share, and up to 2,222,222 units at a price of $0.45 per unit. Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant is exchangeable into one common share at a price of $0.65 for a period of 12 months from closing. The shares are to be issued on a best efforts basis by way of a brokered private placement.

The Agent will receive a commission of 6% of the proceeds of the flow-through offering and 8% of the proceeds of the unit offering, excluding shares or units purchased by Humboldt Capital Corporation. In addition, the Agent will receive an option to purchase 8% of the number of units issued, at an exercise price of $0.45 per unit for a period of one year from closing and a corporate finance fee of $20,000 plus expenses.

The net proceeds of the financing are to be added to Tuscany's working capital. The Corporation's working capital will be used to repay interim financing, which was provided by Humboldt Capital Corporation to finance the previously announced property acquisition, and to make expenditures which satisfy the requirements set forth in the subscription agreements (in particular as they relate to flow-through requirements).

Humboldt Capital Corporation together with R.W. Lamond, Humboldt's control shareholder, own 31% of the outstanding common shares of Tuscany. Humboldt has agreed to purchase 667,000 of the common share offering on a flow-through basis and 370,000 units of the offering.

All of the securities issued will be restricted from trading for a period of four months.

The issuer of the above securities is subject to all regulatory approvals including the approval of the TSX Venture Exchange.

Tuscany also wishes to announce the resignation of Ryan Stevenson. The Corporation has agreed to repurchase for cancellation 200,000 common shares for $35,000 from Mr. Stevenson. Mr. Stevenson has waived his right to exercise any stock options.

Subsequent to the completion of the issuance of 4,000,000 common shares brokered private placement and the 2,222,222 unit brokered placement, assuming both are fully subscribed for, and the cancellation of 200,000 common shares on the repurchase from Ryan Stevenson, there will be 25,717,436 common shares issued and outstanding and 30,945,212 on a fully diluted basis. Assuming a minimum investment of $500,000, R.W. Lamond and Humboldt will own an aggregate of 7,017,667 common shares (27.2%) or 7,351,000 common shares (25.6%) on a fully diluted basis. Humboldt, along with the Board of Directors and senior officers will own 8,317,667 common shares (32.3%) or 9,201,000 common shares (29.7%) on a fully diluted basis.

Tuscany is an emerging junior oil and gas company engaged in the acquisition, exploration and development of oil and natural gas reserves in western Canada.

Forward-looking statements - statements included in this press release that are not historical facts may be considered "forward-looking statements." All estimates and statements that describe the Company's objectives, goals or future plans are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties where actual results could differ materially from those currently anticipated.

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

Contact Information

  • Tuscany Energy Ltd.
    Greg T. Busby
    President & CEO
    (403) 264-2398
    (403) 264-2399 (FAX)
    Tuscany Energy Ltd.
    Robert W. Lamond
    (403) 269-9889
    (403) 269-9890 (FAX)