Butte Energy announces closing of private placement financing



CALGARY, July 30, 2012 /CNW/ - Butte Energy Inc. ("Butte" or the "Company") announces that further to its press releases dated May 16, 2012 and June 29, 2012, it has successfully completed its non-brokered private placement for 9,436,908 common shares in the capital of the Company ("Common Shares") at an issue price of $0.25 per share for aggregate gross proceeds of $2,359,227 (the "Private Placement").

The Common Shares issued pursuant to the Private Placement offering are subject to a hold period under applicable securities laws until December 1, 2012.

The net proceeds of this offering will be used in the Company's on-going exploration and development activities in Central Alberta including the Company's farm-out obligations and for working capital.

Mr. Victor Redekop, a director of the Company, owned, or exercised control or direction over, directly or indirectly, an aggregate of 18,703,912 Common Shares representing 54.5% of the Common Shares outstanding prior to the completion of the Private Placement.  As a result of the Private Placement, Mr. Redekop beneficially owns, or exercises control or direction over, directly or indirectly, an aggregate of 25,703,912 Common Shares, representing approximately 58.8% of the issued and outstanding Common Shares.  As a result of his ownership, the Private Placement constitutes a "related party transaction" pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").  MI 61-101 provides a number of circumstances in which a transaction between an issuer and a related party may be subject to valuation and minority approval requirements.  An exemption from the formal valuation requirements is available as the securities of the Company are not listed or quoted on any of the markets specified in subsection 5.5(b) of MI 61-101 and an exemption from minority approval requirements is available as the fair market value of the related party transaction is less than $2.5 million. Consequently, the Private Placement is not subject to the valuation and minority approval requirements of MI 61-101.  The board of directors of the Company approved the Private Placement.  The Company did not file a material change report more than 21 days before the expected closing of the Private Placement as details of the Private Placement were not settled until shortly before the closing of the Private Placement.

Cautionary statements

This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the use of proceeds from the Private Placement.  Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that regulatory approval will not be obtained in a timely manner or at all. The statements in this news release are made as of the date of this release. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange, Inc. nor its Regulation Service Provider (as that term is defined under the policies of the TSX Venture Exchange) has in any way passed upon the merits of the Proposed Acquisition and associated transactions and has neither approved nor disapproved of the contents of this press release.

Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this restriction may constitute a violation of U.S. Securities laws.

SOURCE: Butte Energy Inc.

For further information:

Butte Energy Inc.

Victor Redekop, Chairman
Tel: (403) 541-5310


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