COSTA announces new lending terms and new financing

    CALGARY, June 15 /CNW/ - COSTA Energy Inc. ("COSTA" or the "Company")
(TSX Venture Exchange: COE) has reached agreement on new lending terms with
its banker, The Bank of Nova Scotia. The new credit facility includes a
revolving line of $900,000 at prime plus 1.25% and a non-revolving amount of
$490,000 at prime plus 2.00% due in full March 31, 2008. A condition of this
agreement is that the Company secure new equity funds of not less than
$750,000 prior to July 15, 2007.
    The Company is proceeding with a non-brokered private placement of up to
13,636,364 units at $0.11 per unit, consisting of one common share and one
warrant ("Warrant") which will entitle the holder thereof to purchase one
common share at a price of $0.16 per share until March 31, 2008. Closing of
this proposed financing is anticipated to occur on or about June 22, 2007.
Gross proceeds will be $1.5 million if the issue is fully subscribed, and will
be used to fund COSTA's ongoing capital program and for working capital
purposes. The common shares and Warrants issued pursuant to this private
placement will be subject to a four month statutory hold period.
    COSTA is also pleased to announce that at the Company's Annual and
Special Meeting held on June 11, 2007, Mr. A. Murray Sinclair and Mr. John
McBride were elected to the Board of Directors. Mr. Sinclair and Mr. McBride
have considerable experience with public companies and serve as directors of
numerous other reporting issuers. In addition, the shareholders passed a
special resolution to exchange all the issued and outstanding Series C special
(non-voting) shares of COSTA for common shares of COSTA on the basis of one
Series C share for one common share at a time to be determined by the Board of
    This new funding will improve the Company's financial position and allow
a continuing development program. Three infill shallow gas wells at Alderson
and a shallow Colony gas well north of Edmonton are planned in the third
quarter. The company will evaluate the sale of fully developed properties; and
the sale or farm-out of properties that are not consistent with the company's
current conservative risk profile.

    COSTA is a Calgary based junior oil and gas company, which explores for,
develops, produces, and sells crude oil, natural gas liquids and natural gas
in Alberta, British Columbia and Saskatchewan.

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

    Forward Looking Statements: Certain information regarding COSTA in this
news release including management's assessment of future plans and operations
and the timing thereof, may constitute forward-looking statements under
applicable securities laws and necessarily involve risks including, without
limitation, risks associated with oil and gas exploration, development,
exploitation, production, marketing and transportation, loss of markets,
volatility of commodity prices, currency fluctuations, imprecision of reserve
estimates, environmental risks, competition from other producers, inability to
retain drilling rigs and other services, delays resulting from or inability to
obtain required regulatory approvals and ability to access sufficient capital
from internal and external sources. As a consequence, COSTA's actual results,
performance or achievements could differ materially from those expressed in,
or implied by, these forward-looking statements and, accordingly no assurance
can be given that any events anticipated by the forward-looking statements
will transpire or occur, or, if any of them do so, what benefits COSTA will
derive therefrom. Readers are cautioned that the foregoing list of factors is
not exhaustive. Furthermore, the forward-looking statements contained in this
news release are made as at the date of this news release and COSTA does not
undertake any obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information, future
events or otherwise, except as may be required by applicable securities laws.

For further information:

For further information: Mr. Terry D. Brooker, President and CEO, COSTA
Energy Inc., (403) 206-3430, Email:

Organization Profile


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