ALTACANADA ENERGY CORP. ANNOUNCES COMPLETION OF REFINANCING AND EFFECTIVE DATE OF CONSOLIDATION

TSX-V SYMBOL: ANG

CALGARY, Feb. 24 /CNW/ - AltaCanada Energy Corp. (the "Company" or "AltaCanada") (TSXV: ANG) is pleased to announce the completion of an additional $2.93 million equity raise through the issuance of convertible preferred shares pursuant to the second tranche of the refinancing announced on February 10, 2011.  In aggregate, the Company's refinancing totaled $13,230,500 comprised of $10,630,500 of new equity and the conversion to equity of $2,600,000 of debt.

Executive Chairman, Charles V. Selby stated that "this refinancing represents a major milestone for the Company and will enable the Company to complete its transformation to an oil exploration company with a Bakken focus".

The financing will reduce debt, will provide positive working capital and enable the Company to continue its Montana Bakken exploration program with joint venture/farm-out partners Reliable Energy Ltd. and One Earth Oil and Gas Inc., including the drilling of three new Montana Bakken wells, the first of which the Company expects will be spudded on or about March 3, 2011.  AltaCanada's Bakken property represents a large substantially unexplored Bakken fairway that is geologically similar to the emerging Alberta Bakken and the Williston Basin.  The three new Bakken wells follow up on AltaCanada's November 2010 Montana Bakken test well which demonstrated Bakken porosity over a 22 foot interval and residual oil saturations in the core. 

The three proposed Bakken wells will be targeting a structure identified on 2D seismic and a geologically mapped truncated edge to the Bakken.  The drill depth to approximately 5,000 feet is shallower than commercial production in the Williston Basin which should lead to lower drilling and completion costs. The estimated costs are $750,000 for vertical test wells and approximately $3,500,000 for horizontal wells completed with multistage fracs.  Under the terms of AltaCanada's farm-out and participation agreements, the Company will pay 12% of the costs of the next three wells estimated to total $400,000 and will retain a 30% interest in the wells and nine earned sections per well.

AltaCanada presently holds approximately 400,000 gross acres of contiguous lands in Blaine County, Montana of which a substantial portion is prospective for the Bakken formation and much of the balance is prospective for secondary Jurassic oil targets.  The Company is also seeking opportunities to acquire additional acreage within the Bakken trend. 

The refinancing of AltaCanada has been accomplished under agreements with Cornerstone Capital Asset Management L.P. ("Cornerstone"), as lead, and Stonecap Securities Inc. ("Stonecap").

The previously announced name change of the Company to the Montana Exploration Corp. will become effective at the opening of trading on Monday, February 28, 2011.  At the same time, the ten for one consolidation of the Company's outstanding common shares will become effective and the trading symbol for the Company will change to "MTZ".

Expressed on a post-consolidation, post-name change basis, the convertible preferred shares will be issued by Montana Exploration Corp. for consideration of $0.50 per share and may be exchanged by the holder at any time up to 18 months following closing for either:

(a)      A post-consolidation common share of Montana Exploration Corp. and one full warrant, which warrant may be exercised for a price $0.80 within 24 months of closing (27 months in respect of warrants to acquire 2,000,000 common shares); or
(b)      Secured debentures in the principal amount of $0.05 for each preferred share converted plus interest accrued from the closing date to the date of conversion. The secured debentures shall bear interest at a rate of prime plus 2.5% payable quarterly and the principal on the secured debentures shall be due and payable 24 months from the date of issuance.  Interest on the debentures may, at the election of Montana Exploration Corp., be paid by the issuance of additional common shares priced at the prevailing 15 day weighted average share trading price.

Following the consolidation, the Company will have outstanding approximately 16.8 million common shares, as well as approximately 212.6 million preferred shares, which in the aggregate may be converted into approximately 21.3 million post-consolidation common shares and warrants at an exercise price of $0.80 exercisable for 24 months from the date of closing (27 months in respect of warrants to acquire 2,000,000 post-consolidation common shares) to acquire an additional approximately 21.3 million post-consolidation common shares.  In addition, the Company will have outstanding: (i) 500,000 warrants with an exercise price of $0.80 each exercisable for 24 months from the closing date to acquire 500,000 post-consolidation common shares issued to National Bank of Canada; (ii) 150,000 warrants with an exercise price of $0.80 each exercisable for 24 months from the closing date to acquire 150,000 post-consolidation common shares issued to Brookfield Bridge Lending Fund Inc.; (iii) 399,200 warrants with an exercise price of $0.50 each exercisable for 18 months from the closing date to acquire convertible preferred shares which are convertible for: (A) 399,200 post-consolidation common shares and 399,200 warrants to acquire post-consolidation common shares (at an exercise price of $0.80 per warrant exercisable for 24 months from the closing date) or (B) $199,600 aggregate principal amount of debentures, issued to Cornerstone Capital Asset Management L.P. and (iv) 105,600 warrants with an exercise price of $0.50 each exercisable for 18 months from the closing date to acquire convertible preferred shares which are convertible for (A) 105,600 post-consolidation common shares and 105,600 warrants to acquire post-consolidation common shares (at an exercise price of $0.80 per warrant exercisable for 24 months from the closing date) or (B) $52,800 principal amount secure debentures, issued to Stonecap Securities Inc. (all of the foregoing expressed on a post-consolidation basis).

The Company is engaged in the acquisition, exploitation and production of crude oil and natural gas reserves in Western Canada and Montana.  For more information on the Company, visit www.altacanada.com.

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 RELEASE.

Caution Regarding Forward Looking Information

This press release contains forward-looking statements within the meaning of securities laws, including the "safe harbour" provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995.  Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook.  Forward-looking statements in this press release include, but are not limited to, the drilling of three additional wells, the anticipated date the first well will spud, anticipated drilling costs, the use of proceeds from the financing, the proposed name change and change of ticker symbol and the anticipated consolidation.

Forward-looking statements and information contained in this press release are based on our current beliefs as well as assumptions made by, and information currently available to, us. Although we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.

By their very nature, the forward-looking statements included in this press release involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements.  These factors include, but are not limited to, the volatility of oil and gas prices; production and development costs and capital expenditures; the imprecision of reserve estimates and estimates of recoverable quantities of oil, natural gas and liquids; the Company's ability to replace and expand oil and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; inadequate insurance coverage; compliance with environmental laws and regulations; changes in tax and royalty laws; the Company's ability to access external sources of debt and equity capital; and the Company's ability to obtain equipment in a timely manner to carry out development activities.  Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive.  When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Furthermore, the forward-looking statements contained in this press release are made as of the date of this document and we do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

SOURCE AltaCanada Energy Corp.

For further information:

  Charles Selby, Executive Chairman   Don Foulkes, President & CEO
Telephone: (403) 265 9091 (ext 247)   (403) 265 9091 (ext 248)
Fax: (403) 262 8866   (403) 265 9021
Email: info@altacanada.com   info@altacanada.com

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AltaCanada Energy Corp.

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