Storm Cat Energy Corporation Announces Closing of Series A Convertible Debt Placement



    DENVER & CALGARY, ALBERTA, January 31 /CNW/ - Storm Cat Energy
Corporation (AMEX:   SCU; TSX: SME) announced today the closing of US$18.54
million of Series A convertible notes, due in 2012, to qualified institutional
investors in a private placement pursuant to Regulation D of the Securities
Act of 1933, as amended, and exemptions from Canadian prospectus and
registration requirements under National Instrument 45-106. The notes
initially will be convertible into 15,841,880 Storm Cat common shares at a
price of US$1.17 per share, subject to adjustments in accordance with the
terms of the notes. The Company may force the conversion of the notes at any
time after 18 months if Storm Cat's common shares trade above US$2.05, as may
be adjusted, for 20 days within a period of 30 consecutive trading days.

    The Company will use the net proceeds from the sale of the Series A notes
to partially fund its 2007 US capital expenditure budget requirements, and to
repay the remaining US$7.5 million of mezzanine debt that was borrowed in
connection with the previously announced Powder River Basin acquisition
completed in August 2006.

    The Company has entered into a registration rights agreement with the
purchasers of the Series A notes pursuant to which it is obligated to file
with the U.S. Securities and Exchange Commission a resale registration
statement relating to the common shares to be issued upon conversion of the
notes.

    The above-described securities have not been registered under the
Securities Act of 1933 or any state securities laws, and unless so registered
may not be offered or sold in the United States, except pursuant to an
exemption from, or in a transaction subject to, the registration requirements
of the Securities Act of 1933 and applicable state securities laws. This press
release is issued pursuant to Rule 135c of the Securities Act of 1933, and
does not constitute an offer to sell, or the solicitation of an offer to buy,
nor shall there be any sale of the notes or common shares in any jurisdiction
in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction.

    In Canada, the notes and any shares issued on conversion of the notes are
subject to a 4-month hold period and may not be traded before May 31, 2007
unless permitted under applicable securities legislation and the rules of the
Toronto Stock Exchange.

    About Storm Cat Energy

    Storm Cat Energy is an independent oil and gas company focused on the
pursuit, exploration and development of large unconventional gas reserves from
fractured shales, coal beds and tight sand formations. The Company has
producing properties in Wyoming's Powder River Basin, exploitation and
development acreage in Canada and Alaska. The Company's shares trade on the
American Stock Exchange under the symbol "SCU" and in Canada on the Toronto
Stock Exchange under the symbol "SME."

    
    Storm Cat Energy Corporation

      J. Scott Zimmerman
      President and Chief Executive Officer

      /s/ J. Scott Zimmerman
    

    Forward-looking Statements

    This press release contains certain "forward-looking statements", as
defined in the United States Private Securities Litigation Reform Act of 1995
relating to the proposed use of proceeds. Forward-looking statements are
statements that are not historical facts; they are generally, but not always,
identified by the words "expects," "plans," "anticipates," "believes,"
"intends," "estimates," "projects," "aims," "potential," "goal," "objective,"
"prospective," and similar expressions, or that events or conditions "will,"
"would," "may," "can," "could" or "should" occur. Forward-looking statements
are based on the beliefs, estimates and opinions of Storm Cat's management on
the date the statements are made and they involve a number of risks and
uncertainties. Consequently, there can be no assurances that such statements
will prove to be accurate and actual results and future events could differ
materially from those anticipated in such statements. Storm Cat undertakes no
obligation to update these forward-looking statements if management's beliefs,
estimates or opinions, or other factors, should change. Factors that could
cause future results to differ materially from those anticipated in these
forward-looking statements include, but a change in the use of proceeds, the
volatility of natural gas prices, the possibility that exploration efforts
will not yield economically recoverable quantities of gas, accidents and other
risks associated with gas exploration and development operations, the risk
that the Company will encounter unanticipated geological factors, the
Company's need for and ability to obtain additional financing, the possibility
that the Company may not be able to secure permitting and other governmental
clearances necessary to carry out the Company's exploration and development
plans, and the other risk factors discussed in greater detail in the Company's
various filings on SEDAR (www.sedar.com) with Canadian securities regulators
and its filings with the U.S. Securities and Exchange Commission, including
the Company's Form 20-F (as amended) for the fiscal year ended December 31,
2005.

    NO STOCK EXCHANGE HAS REVIEWED OR ACCEPTS RESPONSIBILITY FOR THE ADEQUACY
OR ACCURACY OF THIS NEWS RELEASE.




For further information:

For further information: Storm Cat Energy Corporation William Kent,
303-991-5070 Director, Investor Relations or Scott Zimmerman, President and
Chief Executive Officer Paul Wiesner, Chief Financial Officer 87-STORMCAT
www.stormcatenergy.com

Organization Profile

STORM CAT ENERGY CORPORATION

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890