North Peace Completes $26 Million Private Placement



    
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    UNITED STATES. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE
    A VIOLATION OF U.S. SECURITIES LAW./

    TSX-V: NPE
    

    CALGARY, Aug. 7 /CNW/ - North Peace Energy Corp. ("North Peace" or the
"Company") is pleased to announce that it has completed its previously
announced private placement offering. The Company is issuing a total of
13,333,300 units ("Units"), at a price of $1.50 per Unit and 3,636,360
flow-through common shares ("Flow-Through Shares"), at a price of $1.65 per
Flow-Through Share for gross proceeds of approximately $26 million. Each Unit
consists of one common share and half of one common share purchase warrant.
Each full warrant will entitle the holder to acquire one common share at an
exercise price of $2.00 per share until February 7, 2010. The offering was
placed on a "best efforts" basis by a syndicate of agents led by GMP
Securities L.P. and including TD Securities Inc., Blackmont Capital Inc.,
Canaccord Capital Corporation and Raymond James Ltd.
    The proceeds from the offering will be used by the Company to fully fund
all costs associated with its CSS pilot project including the acquisition of
capital equipment, construction costs and the drilling of two horizontal CSS
wells. The remaining funds will be used to: (i) complete the 2008/2009 winter
delineation drilling program, (ii) to advance engineering and environmental
baseline work for the commercial CSS project, and (iii) for general corporate
purposes.
    In mid-2009, following pilot production and the completion of the
delineation program, North Peace expects to be in a position to submit an
application to the Energy Resources Conservation Board ("ERCB") for the first
10,000 bbl/d phase of a commercial project.
    All of the securities issued by North Peace pursuant to the private
placement are subject to a four month hold period under Canadian securities
laws.

    About North Peace

    North Peace has an in situ oil sands project in northern Alberta with
86,400 acres of nearly contiguous leases bridging the Peace River and
Athabasca oil sands areas.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this news release.

    This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction. The
securities offered have not and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold in the United States except in
certain transactions exempt from the registration requirements of the U.S.
Securities Act and applicable states securities laws.

    Forward-Looking Statements: Certain statements contained in this news
release constitute forward-looking statements that involve known and unknown
risks, uncertainties and other factors that may cause actual results or events
to differ materially from those anticipated in such forward-looking
statements. No assurance can be given that these expectations will prove to be
correct and such forward-looking statements included in this release should
not be unduly relied upon. Actual results could differ materially as a result
of changes in North Peace's plans, changes in commodity prices, regulatory
changes, general economic, market and business conditions as well as
production, development and operating performance and other risks associated
with oil and gas operations including anticipated success of resource
prospects and the expected characteristics of resource prospects; anticipated
capital requirements, project rates of return and estimated project life;
estimates of original discovered resource; estimates of recovery factors; lack
of diversification; and overall technical and economic feasibility of the
Company's project. These statements speak only as of the date of this release
or as of the date specified in the documents accompanying this release, as the
case may be. The Company undertakes no obligation to publicly update or revise
any forward-looking statements except as expressly required by applicable
securities laws.

    %SEDAR: 00019211E




For further information:

For further information: Louis Dufresne, President and CEO, James
Glessing, Vice President, Finance & CFO, North Peace Energy Corp., 470, 505 -
3rd Street SW, Calgary, Alberta, T2P 3E6, Telephone (403) 262-6024, Facsimile:
(403) 262-6072, E-mail: info@northpec.com, www.northpec.com

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NORTH PEACE ENERGY CORP.

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