Iteration Energy announces closing of common share financing and exercise of over-allotment option, and provides credit facility update



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

    (All amounts are in Canadian dollars, unless stated otherwise)

    CALGARY, May 6 /CNW/ - Iteration Energy Ltd. (TSX-ITX) ("Iteration" or
the "Company") announced today that it has closed the previously announced
bought deal financing of 39,100,000 common shares (the "Offering"). The
Offering was led by Cormark Securities Inc. and included FirstEnergy Capital
Corp., Peters & Co. Limited, CIBC World Markets Inc., Scotia Capital Inc. and
Wellington West Capital Markets Inc. (collectively, the "Underwriters"). The
Underwriters have exercised the full over-allotment option to purchase an
additional 5,865,000 common shares at $1.28 per common share for additional
gross proceeds of approximately $7.5 million. Gross proceeds from the Offering
and the exercise of the over-allotment option total approximately $57.5
million
    Iteration intends to initially use the net proceeds from the Offering to
reduce indebtedness under its current credit facilities, including the
repayment, in full, of the $25 million supplemental facility.

    Credit Facility Update

    Iteration has successfully extended the maturity of its existing credit
facilities from April 30, 2009 to May 29, 2009. The Company is negotiating new
credit facilities and has received formal credit commitments from a syndicate
of four lenders to provide the Company with a new $265 million credit facility
consisting of a $252.5 million revolving facility and a $12.5 million
operating line. The credit facility includes customary closing conditions,
including execution of a definitive credit agreement, which is expected to be
completed by mid May 2009. This replacement credit facility is being provided
by Canadian Imperial Bank of Commerce as Co-Lead and Administrative Agent, The
Bank of Nova Scotia as Co-lead and Syndication Agent, BMO Capital Markets as
Documentation Agent and Alberta Treasury Branch. As at April 27, 2009, the
Corporation had an aggregate amount of approximately $288 million outstanding
under the credit facilities. Following application of the proceeds from the
equity offering and over-allotment option, as contemplated above, the
Company's net debt is estimated to be approximately $235 - $240 million and is
expected to be approximately $230 million or less by June 30, 2009.

    The securities offered have not been and will not be registered under the
U.S. Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or applicable exemption from the
registration requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of the
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful.

    ADVISORY: This press release contains forward-looking statements,
including statements concerning completion of the offering, successful
negotiation of replacement credit facilities the anticipated use of the net
proceeds of the offering, and future debt levels. Although Iteration believes
that the expectations reflected in these forward-looking statements are
reasonable, undue reliance should not be placed on them because Iteration can
give no assurance that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very nature they
involve inherent risks and uncertainties. The intended use of the net proceeds
of the offering by Iteration might change if the board of directors of
Iteration determines that it would be in the best interests of Iteration to
deploy the proceeds for some other purpose. There can be no assurance that the
newly negotiated credit facility will be finalized or, if finalized, on terms
satisfactory to the Company or on terms contemplated in the press release. The
forward-looking statements contained in this press release are based on the
Company's current beliefs as well as assumptions made by, and information
currently available to, the Company including future debt levels which are
based assumptions for commodity prices, capital expenditures and funds from
operations. Although management considers these assumptions to be reasonable
based on information currently available to it, they may prove to be
incorrect. By their very nature, forward-looking statements involve inherent
risks and uncertainties, both general and specific, and risks that
forward-looking statements will not be achieved. The forward looking
statements contained in this press release are made as of the date hereof and
Iteration undertakes no obligations to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.

    
    The Toronto Stock Exchange has neither approved nor disapproved the
    contents of this press release.
    

    %SEDAR: 00002576E




For further information:

For further information: Iteration Energy Ltd., Brian Illing, President
& CEO; or Peter Scott, Vice President, Finance & CFO, (403) 261-6883

Organization Profile

ITERATION ENERGY LTD.

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