CALGARY, Alberta and DENVER, Dec. 5 /CNW/ -- Storm Cat
Energy Corporation (Amex: SCU; TSX: SME) today announced that, effective on
November 30, it closed its private placement announced on November 21, 2005
with a single investor and existing shareholder. The private placement
consisted of the sale of 2,325,581 common shares of the Corporation at a price
of U.S. $2.15 per share, resulting in gross proceeds to the Corporation of
U.S. $5,000,000. In addition to the common shares, the 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; each full warrant
will be exercisable for a ending October 25, 2007 at an exercise price of U.S.
$2.52 per share. In connection with the closing, the Corporation has paid the
placement agents fees in cash in the amount of U.S. $300,000.
None of the securities distributed under the Offering may be traded on the
TSX Venture Exchange or otherwise sold in Canada or to or for the benefit of a
resident of Canada before March 31, 2006 unless permitted under Canadian
securities legislation and the rules of the TSX Venture Exchange.
In addition, Storm Cat today announced that it has entered into agreements
on a new financing to further augment its October 25th U.S. private placement
with a raise of an additional U.S. $2.50 million from two investors. Like the
additional financing that closed effective November 30, except for an
adjustment in pricing to reflect recent market activity, this new financing
will be on terms substantially similar to those that applied to the October
25th US private placement. This additional private placement will consist of
the sale of 992,063 common shares of the Corporation at a price of U.S. $2.52
per share, resulting in gross proceeds to the Corporation of U.S. $2.50
million. In addition to the common shares, the investors will receive common
share warrants exercisable for three tenths (3/10) of a common share, for each
common share purchased; each full warrant will be exercisable until October
25, 2007 at an exercise price of U.S. $2.97 per share. In connection with this
new financing, the Corporation has agreed to pay placement agent fees in cash
in the amount of U.S. $150,000. The closing of this new financing is subject
to the acceptance of the TSX Venture Exchange and American Stock Exchange, and
satisfaction of customary terms and conditions.
This private placement will be covered by a registration rights agreement
substantially similar to that entered into with respect to the Company's
October 25th financing, pursuant to which the Corporation will be required to
file with the SEC a Registration Statement covering the common shares issued,
including any common shares issued upon exercise of the warrants, by December
31, 2005. If the Registration Statement is not filed by December 31, 2005 or
is not declared effective by the SEC by April 20, 2006, then the Corporation
will be liable to make pro rata payments to each investor who is a party to
this new financing 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.
The securities offered in the above-described private placements have not
been registered under the United States 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.
Storm Cat will use the net proceeds from these financings to further fund
its exploration and drilling programs on its Powder River Basin properties
where two drilling rigs are currently active, the Elk Valley project in
British Columbia, onshore Cook Inlet Alaska, and its shallow gas project in
Saskatchewan, Canada.
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 and
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.
