CALGARY, Alberta and DENVER, Oct. 20 /CNW/ -- Storm Cat
Energy Corporation (Amex: SCU; TSX.V: SME) announced today that it entered
into a private placement purchase agreement with Canadian and U.S. investors
to sell by way of a private placement up to 10,000,000 common shares of the
Company at a price of $ 2.15 per share. In addition, each investor will
receive a common share warrant exercisable for three tenths (3/10) of a common
share, for each common share purchased in the private placement, and each full
warrant will be exercisable for a period of two years at an exercise price of
$ 2.52 per share. In connection with the financing, the Company will pay
placement agents fees equal to 6% of the gross proceeds from the private
placement. The closing of the financing is subject to the acceptance of the
TSX Venture Exchange and satisfaction of customary terms and conditions.
The Company will also enter into a registration rights agreement with the
investors obliging the Company to file with the SEC a Registration Statement
on Form S-1 covering the shares issued, including any shares issued upon
exercise of the warrants, by December 31, 2005. If that Registration
Statement is not filed by December 31, 2005 or is not declared effective by
the SEC by April 20, 2006, then the Company will be liable to make pro rata
payments to each investor in an amount equal to 1.0% of the aggregate amount
invested by such investor for each 30-day period or pro rata for any portion
thereof following such deadlines.
In connection with this financing directors and executive officers of the
Company have entered into lock-up agreements pursuant to which they have
agreed not to dispose of more than 20% of their shares of the Company until
90 days following the effective date of the above-noted Registration
Statement.
The Company will use the net proceeds from the sale of the financing to
continue to develop the Company's exploration and drilling program.
The securities offered in the private placement have not been registered
under the Securities Act of 1933 or any state securities laws, and unless so
registered may not be offered or sold in the United States, except pursuant to
an exemption from, or in a transaction subject to, the registration
requirements of the Securities Act of 1933 and applicable state securities
laws. This press release is issued pursuant to Rule 135(c) of the Securities
Act of 1933, and does not constitute an offer to sell, or the solicitation of
an offer to buy, nor shall there be any sale of the common shares or warrants
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction.
About Storm Cat Energy
Storm Cat Energy is an independent oil and gas company focused on the
pursuit, exploration and development of large unconventional gas reserves from
fractured shales, coal beds and tight sand formations. The Company has
producing properties in Wyoming's Powder River Basin, exploitation/development
acreage in Canada and Alaska, and high-risk, high-reward exploration acreage
in Mongolia. The Company's shares trade on the American Stock Exchange under
the symbol "SCU" and in Canada on the TSX Venture Exchange under the symbol
"SME."
By Order of the Board of Directors
Storm Cat Energy Corporation
J. Scott Zimmerman
President and Chief Executive Officer
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
