Iteration Energy Ltd. (ITX) Announces Closing of $52.375 Million Acquisition of Producing Oil and Gas Properties in South East Alberta and North West Alberta

    THE U.S./

    CALGARY, Oct. 1 /CNW/ - Iteration Energy Ltd. ("Iteration") (TSX:ITX) is
pleased to announce that it has closed the previously announced indirect
acquisition through a partnership (the "Acquisition") of certain petroleum and
natural gas properties and related assets located in the Manyberries area
located in South East Alberta and the Peace River Arch area in North West
Alberta. The effective date of the Acquisition was June 1, 2007 and the
closing date was September 27, 2007. The acquisition was funded by Iteration's
existing credit facility (which has been increased to $95 million) and funds
from operations.
    Iteration also announces that it has filed its preliminary short form
prospectus in all provinces of Canada in respect of the previously announced
$25 million bought deal subscription receipt offering ("Offering") with a
syndicate of underwriters led by FirstEnergy Capital Corp. and including
Peters & Co. Limited and RBC Capital Markets (the "Underwriters").
    Under the terms of Offering, Iteration will issue 5.21 million
subscription receipts at $4.80 per subscription receipt. In addition,
Iteration granted the Underwriters an over-allotment option to purchase up to
an additional 781,500 subscription receipts which may be exercised up to
30 days after the closing. Insider participation by management, officers and
directors of Iteration is limited to 15,000 subscription receipts. As the
Acquisition has now closed, each subscription receipt will entitle the holder
to receive one common share of Iteration, without the payment of any
additional consideration, upon the closing of the Offering.
    The net proceeds from the Offering, estimated to be approximately
$23,459,400 ($27,023,040 in the event the Underwriters' over-allotment option
is exercised in full), will be used by Iteration to reduce its indebtedness
under its credit facility.
    The Offering is subject to certain conditions including required
regulatory approvals. The subscription receipts have not been and will not be
registered under the United States Securities Act of 1933 or any state
securities law, and may not be offered or sold in the United States or to U.S.
persons unless an exemption from registration is available. The closing of the
Offering is expected to occur on or about October 17, 2007.

    Iteration Energy Ltd.

    Iteration is an Alberta based corporation engaged in the business of
exploring for and developing oil and natural gas reserves in Western Canada
and acquiring natural resource properties. Iteration's common shares are
listed on the Toronto Stock Exchange under the symbol "ITX".

    %SEDAR: 00002576E

For further information:

For further information: Iteration Energy Ltd., Mr. Brian Illing,
President and CEO, or Mr. Sean Johnson, CFO, (403) 261-6883

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