AltaCanada Recapitalization and Private Placement

    
    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    TSX-V SYMBOL: ANG
    

CALGARY, Oct. 27 /CNW/ - AltaCanada Energy Corp. (ANG:TSX) announces that, subject to the approval of the TSX Venture Exchange, it proposes to complete a $5 million private placement of 62,500,000 shares at $0.08/share. The Company has several purchasers committed to subscribe for a total of 60% of these shares. James Collins of McAllen Texas, a Director of AltaCanada and a substantial shareholder, has agreed to purchase 50% of the issue. The shares issued pursuant to the private placement will be subject to a hold period of four months, pursuant to applicable securities laws and policies of the TSX Venture Exchange.

The use of proceeds from the issue will be to retire approximately $4 million of outstanding indebtedness with AltaCanada's corporate lender and to provide working capital for a drilling program that will focus on oil targets in both the Jurassic Shaunavon and Bakken formations that are actively being developed adjacent to the Company's Montana block, and to further develop the Company's natural gas prospects.

Shareholders, who are accredited investors, or who otherwise qualify under prospectus exemptions, are invited to participate and can do so by contacting Don Foulkes, Don Jackson or Brian Page at 403-265-9091 or by downloading the subscription form on our website www.altacanada.com, when available. A placement fee may be paid on third party subscriptions.

Pursuant to the policies of the TSX Venture Exchange and Multilateral Instrument 61-101 -Protection of Minority Security Holders in special Transactions ("MI 61-101"), the private placement is classified as a "related party transaction" as James Collins will be a purchaser of 31,250,000 shares. The private placement was approved by four of the five directors of the Company, James Collins having abstained from the vote. The directors, who voted, after seeking legal advice, determined that exemptions from the formal valuation and minority shareholder approval requirements under MI 61-101, are available since neither the fair value of such shares nor the consideration to be received for those securities exceeds $2,500,000. After the private placement, James Collins will own or control 46,756,591 shares or 33.9% of the outstanding common shares.

Subsequent to the issue, AltaCanada intends to recommend to shareholders that the share capital of the Company be consolidated on a 1 for 10 basis, and the Company be renamed, Montana Exploration Corp. A shareholder meeting will be called in the near future to approve these matters.

Additionally the Company will, subject to the approval of the TSX Venture Exchange, offer holders of its outstanding convertible debentures, maturing at December 21, 2009 and January 30, 2011 the right to convert the principal amount of such debentures into common shares at the same price, $0.08 per share. In aggregate, the outstanding debentures total $3.1 million of face value before conversion.

After the anticipated private placement and the conversion to common shares of the debentures, AltaCanada would have 176,693,042 shares outstanding prior to the consolidation:

    
    Prior to issue                 74,509,917
    Private placement              62,500,000
    Conversion of debentures       39,683,125
                                  -----------
                  Total           176,693,042
    

Assuming the full conversion of the debentures, James Collins would own or control 44.3% of the outstanding shares.

The Corporation 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 Corporation, 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.
    

SOURCE ALTACANADA ENERGY CORP.

For further information: For further information: Donald Foulkes, President & CEO, Telephone: (403) 265-9091 (ext 248), Fax: (403) 265-9021, Email: info@altacanada.com; Donald Jackson, Executive VP & COO, (403) 265-9091 (ext 234), (403) 265-9021

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ALTACANADA ENERGY CORP.

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