Carmen Energy Inc. Announces Filing of Final Prospectus and Execution of Agency Agreement

CALGARY, Dec. 13, 2011 /CNW/ - Carmen Energy Inc. ("Carmen" or the "Corporation") (TSX Venture Exchange: CEI) is pleased to announce that further to its press release of December 5, 2011 relating to the filing of the preliminary short form prospectus, Carmen has filed and obtained a receipt for the final short form prospectus in the provinces of Alberta, British Columbia, Saskatchewan and Ontario. In connection with the filing of the prospectus, Carmen has executed an agency agreement with Macquarie Private Wealth Inc., the sole and exclusive agent (the "Agent"), and Carmen and the Agent have determined the terms of the Offering (as defined herein).

The final prospectus was filed in respect to a public offering of: i) up to 11,111,111 of common shares issued as "flow through shares" pursuant to the Income Tax Act (Canada) ("Flow-Through Shares") at a price of $0.27 per Flow-Through Share for gross proceeds of approximately $3,000,000; and ii) up to 13,043,478 units ("Units") at a price of $0.23 per Unit (collectively, the "Offering"). Each Unit will be comprised of one common share of the Corporation (a "Common Share") and one half of one Common Share purchase warrant (each whole warrant a "Warrant"). Each Warrant shall be exercisable for one Common Share at a price of $0.40 for a period of 24 months from the date of issuance. The Common Shares and the Warrants comprising the Units will separate immediately upon the closing of the Offering. The Units and the Flow-Through Shares, are collectively referred to herein as the "Offered Securities". The Units and the Flow-Through Shares are offered separately from each other. It is currently anticipated that the closing of the Offering will occur in one or more tranches, provided that the any closing relating to the Flow-Through Shares shall occur on or before December 30, 2011. The first closing is anticipated to occur on December 28, 2011. Additional closings of the Offering may occur at any time within 90 days from the date of the prospectus.

The issued and outstanding Common Shares are listed on the TSX Venture Exchange ("TSXV") under the symbol "CEI". The TSXV has conditionally approved the listing of the Common Shares and the Common Shares issuable upon exercise of the Warrants to be distributed under the short form prospectus. Listing of such Common Shares will be subject to the Corporation fulfilling all of the listing requirements of the TSXV.

Under the term of the agency agreement dated effective as of November 22, 2011 (the "Agency Agreement"), the Corporation has agreed to pay the Agent a cash fee equal to 6% of the gross proceeds of the Offering. In addition, the Corporation shall also grant the Agent and its designated sub-agents, if any, that number of non-transferable options (the "Agent's Options") equal to 6% of the number of Offered Securities sold under the Offering.  Each Agent's Option will entitle the Agent or its designated sub-agent, if any, as applicable, to purchase one Unit exercisable for twenty four months at price of $0.23 per Unit. The Units issuable upon the exercise of the Agent's Option will have the same terms and composition as the Units issued in connection with the Offering. The Corporation will also reimburse the Agent for reasonable out-of-pocket expenses incurred by the Agent in connection with the Offering, including the Agent's legal fees and expenses.

In addition, concurrently with the Offering, Carmen will complete a private placement (the "Concurrent Private Placement") up to 2,173,914 units (the "Placement Units") at a price of $0.23 per Placement Unit. Each Placement Unit shall be comprised of one Common Share (a "Placement Common Share") and one half of one Common Share purchase warrant (each whole warrant, a "Placement Warrant"). The Placement Warrants shall have the same terms and conditions of exercise as the Warrants issued pursuant to the Offering. The Placement Common Shares and Placement Warrants comprising the Placement Units issued pursuant to the Concurrent Private Placement will be subject to a statutory hold period. The Concurrent Private Placement is subject to a number of conditions including completion of definitive documentation, the concurrent closing of the Offering and the approval of the TSXV. The TSXV has conditionally approved the listing of the Placement Common Shares (including any Common Shares issuable upon exercise of the Placement Warrants). Listing of such Common Shares will be subject to the Corporation fulfilling all of the listing requirements of the TSXV. The Corporation anticipates that the Concurrent Private Placement will close on or before December 28, 2011.

The securities being offered have not been, nor will be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirement of such Act. This release does not constitute an offer for sale of the Offered Securities.

About Carmen Energy Inc.

Carmen is based in Calgary, Alberta and a publicly traded oil and gas exploration and production company. The focus is on exploration and development of Western Canadian Sedimentary Basin based oil and gas properties. The current projects are the Jumpbush properties in south eastern Alberta, the Ferrybank properties in central Alberta, the Sylvan Lake area properties in Southern Alberta, the Viking-Kinsella properties in Alberta and the Hamburg properties in northern western Alberta.

ON BEHALF OF THE BOARD OF DIRECTORS

Mr. Brian Doherty, President, CEO and Director
Contact: brian.doherty@carmenenergy.ca; (403) 537-5590

Advisory Regarding Forward-Looking Information and Statements

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "will", "expects", "believe", "plans", "potential" and similar expressions are intended to identify forward-looking statements or information. More particularly and without limitation, this press release contains statements relating to "reserves" which are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, which the reserves described, can be profitably produced in the future. Readers should be cautioned that the forgoing list of forward-looking statements and information contained herein should not be considered exhaustive.

Specifically, this news release contains forward looking statements relating Offering and the Concurrent Private Placement. The closing of the Offering and Concurrent Private Placement could be delayed if the Corporation is not able to obtain the required subscriptions to complete the Offering and Concurrent Private Placement and the necessary regulatory approvals required for completion of the Offering and Concurrent Private Placement and on the timeframes contemplated. The Offering and Concurrent Private Placement will not be completed at all if the subscriptions to complete the Offering and Concurrent Private Placement are not obtained or if the necessary regulatory approvals are not obtained or, unless waived, some other condition to closing is not satisfied. Accordingly there is a risk that the Offering and Concurrent Private Placement will not be completed within the anticipated time or at all. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide securityholders with a more complete perspective on Carmen's future operations and such information may not be appropriate for other purposes.

The forward-looking statements and information in this press release are based on certain key expectations and assumptions made by Carmen. Although Carmen believes that the expectations and assumptions on which such forward looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because Carmen can give no assurance that they will prove to be correct.

The forward-looking statements and information contained in this press release are made as of the date hereof and Carmen undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.