Butte Energy Inc. Announces Proposed Private Placement of up to $16 million

TSXV ticker symbol: BEN

CALGARY, July 4, 2014 /CNW/ - Butte Energy Inc. (the "Corporation") (TSXV: BEN) is pleased to announce that it intends to complete a non-brokered private placement of up to $16 million of common shares of the Corporation, on a post-consolidation basis (the "Offering").

The Offering will be subject to the consolidation of the issued and outstanding common shares of the Corporation (the "Consolidation") on the basis of up to five (5) pre-consolidation common shares of the Corporation ("Pre-Consolidation Shares") for every one (1) post-consolidation common share (a "Post-Consolidation Share"), or at any final ratio as the board of directors of the Corporation may determine to be appropriate (the "Consolidation Ratio").  The Corporation currently intends to seek shareholder approval for the Consolidation at its next annual meeting of shareholders.

Assuming completion of the Consolidation, the Corporation will issue Post-Consolidation Shares using a pre-consolidation price of $0.25 per share for aggregate gross proceeds of up to $16,000,000, under the Offering.

The closing of the Offering is expected to occur prior to the end of July 2014 and is subject to the completion of formal documentation, shareholder approval of the Consolidation and receipt of regulatory approval, including the conditional approval of the TSX Venture Exchange (the "Exchange").

The Corporation intends to use the net proceeds from the Offering for proving up the Corporation's existing and new prospects in Alberta as well as working capital for ongoing operations.

In connection with the Consolidation and the Offering, the Corporation also intends to enter into debt settlement agreements to settle the Corporation's outstanding non-bank debt in the aggregate of up to $11 million owing to two creditors of the Corporation (the "Debt Settlements"), each of whom is an insider of the Corporation, by the issuance of Post-Consolidation Shares using a pre-consolidation price of $0.50 per share.

It is expected that shareholder approval for the Debt Settlements will be sought at the Corporation's next annual meeting of shareholders.  The Debt Settlements will be subject to completion of formal documentation and receipt of shareholder and regulatory approval, including the conditional approval of the Exchange.

All Post-Consolidation Shares issued pursuant to the Offering and the Debt Settlement shall be subject to a four (4) month statutory hold period from the closing date.

Information Regarding the Corporation

The Corporation is an emerging oil and gas company engaged in the exploration for and development and production of oil and natural gas reserves in Western Canada.  The Corporation's common shares trade on the Exchange under the symbol "BEN".

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 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.

Forward looking information

This news release contains "forward-looking information" within the meaning of applicable securities laws.  These statements relate to future events or future performance. The use of any of the words "could", "intend", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Corporation's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. In particular, this release contains forward-looking information relating to the completion and timing of the Offering and the Debt Settlements, the use of proceeds of the Offering and the intention to seek shareholder approval for the Consolidation and the Debt Settlements. Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to the Corporation. The material factors and assumptions include that management will be able to raise adequate proceeds from the Offering, that the Corporation will obtain all necessary regulatory approvals for the Offering, the Debt Settlements and the Consolidation, and that the board of directors will not determine that it is in the best interests of the Corporation to change the intended use of proceeds or not to proceed with seeking shareholder approval of the Consolidation and the Debt Settlements. Risk Factors that could cause actual results or outcomes to differ materially from the results expressed or implied by forward-looking information include, among other things: the failure to obtain the required approvals for the Offering, the Debt Settlements or the Consolidation in a timely fashion or at all, the ability for the Corporation to enter into agreements respecting the Debt Settlements, general economic conditions, market risks relating to the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses; health, safety and environmental risks; commodity price and exchange rate fluctuations; and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures).  The Corporation cautions the reader that the above list of risk factors is not exhaustive. The forward-looking information contained in this release is made as of the date hereof and the Corporation is not obligated to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws. Because of the risks, uncertainties and assumptions contained herein, investors should not place undue reliance on forward-looking information. The foregoing statements expressly qualify any forward-looking information contained herein.

SOURCE: Butte Energy Inc.

Butte Energy Inc.
Victor Redekop, Chairman
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