Welton Energy Corporation
TSX : WLT
TSX : WLT.WT
TSX : WLT.DB

Welton Energy Corporation

August 16, 2006 08:01 ET

Welton Energy Corporation Enters Into Equity Financing for $4,000,000

CALGARY, ALBERTA--(CCNMatthews - Aug. 16, 2006) -

Not for distribution to United States newswire services or for dissemination in the United States.

Welton Energy Corporation ("Welton", "the Corporation") (TSX:WLT)(TSX:WLT.DB)(TSX:WLT.WT) has entered into an equity financing arrangement with Blackmont Capital Inc. ("Blackmont") on a bought deal basis. The offering will consist of 2,000,000 common shares on a "flow-through" basis eligible for Canadian Exploration Expenses (the "Flow-Through E Shares") at a price of $1.25 per Flow-Through E Share for total proceeds of $2,500,000. In addition, Blackmont will have the option to purchase an additional 400,000 Flow-Through E Shares, exercisable at any time up to 48 hours prior to close of the offering, subject to certain conditions.

Concurrently, and in addition to the financing noted above, the Company has received commitments to participate in an additional equity offering with Insiders of the company for up to 1,305,000 common shares on a "flow-through" basis eligible for Canadian Development Expenses (the "Flow-Through D Shares") at a price of $1.15 per Flow-Through D Share for total proceeds of $1,500,000.

Proceeds of the offering will be used for general corporate purposes.

The common shares to be issued under this offering will be offered in the provinces of British Columbia, Alberta, Ontario, Quebec and Nova Scotia by way of a private placement.

Closing of these offerings is expected to occur on or before August 31, 2006 and is subject to receipt of all necessary regulatory approvals.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy the common shares in any jurisdiction. Such securities have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States, or to a U.S. person, absent registration or an applicable exemption from the registration requirement.

Cautionary Statements

Certain information set forth in this document contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of the preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Welton's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits Welton will derive therefrom. Welton disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. A barrel of oil equivalent (boe) is derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent. A boe conversion may be misleading, particularly if used in isolation, as it is based on an energy equivalency conversion method primarily applicable at the burner tip and may not represent a value equivalency at the wellhead.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Welton Energy Corporation
    Donald A. Engle
    President
    (403) 215-4747
    or
    Welton Energy Corporation
    David C. Whiteley
    Chief Financial Officer
    (403) 215-4757
    www.weltonenergy.com