CALGARY, Alberta and DENVER, Sept. 19 /CNW/ -- Storm Cat Energy Corporation (Amex: SCU; Toronto: SME) today announced that it has entered into agreements in principal with a single investment group based in Ontario, Canada, pursuant to which this investment group will, acting as portfolio manager for fully-managed accounts, purchase 7,594,937 units (C$12,000,000.46) and 6,172,839 flow-through common shares (C$11,111,110.20) (the "Offering"). Each unit, priced at C$1.58 per unit, will comprise one common share and approximately 0.28 of a common share purchase warrant (2,126,582 warrants). Each whole common share purchase warrant will be exercisable into one common share at a price of C$1.90 per share for a period of 18 months from closing. Each flow-through common share is priced at C$1.80 per share. In connection with the Offering, the Company will pay a cash commission equal to 6% of the aggregate gross offering amount. The completion of the Offering is subject to the acceptance of the Toronto Stock Exchange and the American Stock Exchange. The net proceeds from the sale of the units will be used to pay down mezzanine debt recently incurred to fund its acquisition in the previously announced acquisition in the Powder River Basin and to fund the Company's exploration and development program of the acquired properties in the Powder River Basin, Wyoming, and for general corporate purposes. The net proceeds from the sale of flow-through common shares will be used to incur exploration and development expenses which qualify as CEE under the Income Tax Act (Canada). The securities to be issued under the Offering 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. << 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. The Company's shares trade on the American Stock Exchange under the symbol "SCU" and in Canada on the Toronto Stock Exchange under the symbol "SME." NO STOCK EXCHANGE HAS REVIEWED OR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE