Kallisto Energy Corp. Announces $9 Million Bought Deal Financing

CALGARY, May 18 /CNW/ - Kallisto Energy Corp. ("Kallisto" or the "Company") (TSX VENTURE:KEC) is pleased to announce that it has entered into an agreement with a syndicate of underwriters (the "Underwriters") led by Acumen Capital Finance Partners Limited pursuant to which the Underwriters have agreed to purchase on a bought deal basis for resale 9,090,910 common share special warrants of the Company (the "Common Share Special Warrants") at an issue price of $0.825 per Common Share Special Warrant and 1,578,948 flow through special warrants (the "Flow Through Special Warrants") at a price of $0.95 per Flow Through Special Warrant (collectively, the "Special Warrants") for aggregate gross proceeds of $9.0 million (the "Offering"). The Company has also granted to the Underwriters an over-allotment option (the "Over-Allotment Option") exercisable at any time prior to the closing of the Offering, to increase the Offering by up to an additional 3,636,364 Common Share Special Warrants at a price of $0.825 per Common Share Special Warrant for further gross proceeds of approximately $3,000,000 which would increase the Offering to approximately $12,000,000, if fully exercised.

Each Special Warrant will entitle the holder to receive, for no additional consideration and without further action on the part of the holder, one common share of the Company (the "Common Shares"). The Special Warrants will be exercisable by the holder at any time after the Closing and all unexercised Special Warrants will be deemed to be exercised on the earlier of (a) four months and a day following the Closing, and (b) the 5th business day following the day that a Receipt is issued by the securities regulatory authorities in the Provinces of Alberta, British Columbia and Ontario for a final prospectus qualifying the Common Shares to be issued upon the exercise of the Special Warrants.

The Company will use reasonable commercial efforts to file a final prospectus qualifying the Common Shares issued upon exercise of the Special Warrants pursuant to National Instrument 44-101 and obtain a final passport receipt (the "Receipt") evidencing a receipt for the Prospectus on behalf of each of the securities regulatory authorities in each of the provinces of BC, Alberta and Ontario, pursuant to Multilateral Instrument 11-102 within the later of 45 days following the Closing Date (hereinafter defined) and July 30, 2010 (the "Qualification Deadline"). If the Receipt dated on or before the Qualification Deadline is not obtained, the Company shall issue to each holder of Common Share Special Warrants, for no additional cost to and without further action on the part of such holder, an additional 0.1 of a Common Share for each Common Share to be issued to such holder pursuant to the Common Share Special Warrant held by such holder. If a Receipt is not obtained dated on or before the Qualification Deadline, the Company shall nevertheless continue to use its best efforts to obtain such Receipts.

The Offering is scheduled to close on or about June 8, 2010 (the "Closing Date") and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange.

Proceeds of the Common Share Special Warrant portion of the Offering will be used to fund Kallisto's exploration and development program and for general corporate purposes, with the gross proceeds from the sale of the Flow Through Special Warrants used to fund ongoing exploration activities eligible for Canadian exploration expenses ("CEE"), or Canadian development expenses eligible for conversion to CEE, which will be renounced in favour of the subscribers of the Flow Through Special Warrants effective on or before December 31, 2010.

ABOUT KALLISTO

Kallisto is a Calgary-based junior resource company engaged in the exploration, development and production of oil and natural gas primarily in Alberta.

Neither 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.

Forward Looking Information

The reader is advised that some of the information herein may constitute forward looking statements within the meaning assigned by National Instrument 51-102 and other relevant securities legislation. In particular these include, but are not limited to, statements with respect to the private placement, the use of proceeds received by Kallisto from the private placement and incurring and renouncing certain expenditures to investors on a flow-through basis. These statements are based on management's current expectations. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Kallisto at the time of preparation, may prove to be incorrect and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to forward- looking information contained herein to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

SOURCE Kallisto Energy Corp.

For further information: For further information: Robyn Lore, President and CEO, Telephone: (403) 237-9996, Facsimile: (403) 264-0416

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Kallisto Energy Corp.

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