Ember Resources Inc. announces a marketed common share offering and provides
a corporate update

    
    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATIONIN
    THE UNITED STATES./
    

CALGARY , Oct. 27 /CNW/ -

Equity Financing

Ember Resources Inc. ("Ember" or the "Company") has filed a preliminary short form prospectus (the "Prospectus") in each of the Provinces of Canada (other than Quebec ) in connection with a marketed public offering (the "Offering") of common shares (the "Common Shares"). Ember intends to conduct the Offering through a syndicate of underwriters led by RBC Capital Markets and including CIBC World Markets, FirstEnergy Capital, GMP Securities and Peters & Co. Limited (the "Underwriters"). Aggregate gross proceeds from the Offering are anticipated to be approximately $20,000,000 .

The Offering will be priced in the context of the market with the final terms of the Offering to be determined at the time of pricing. The Common Shares will be offered in all of the provinces of Canada (other than Quebec ) and on a private placement basis in the United States pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended, (the "1933 Act"). The Offering is scheduled to close on or about November 11, 2009 and is subject to certain customary conditions and regulatory approvals, including but not limited to the approval of the Toronto Stock Exchange.

Ember's three major shareholders have indicated an intention to purchase their pro-rata share of the Offering representing approximately 49.5% of the total Offering.

The Company intends to use the net proceeds of the offering to repay $10 million of its existing revolving credit facility and the remainder to fund forecast capital expenditures for 2009 and 2010, including the anticipated drilling of 40 net wells.

The Company has $18 million of drilling programs planned for Q4 2009 and Q1 2010. The Q4 2009 program consists of 22 net wells at a total capital cost to drill, complete, equip and tie-in of $8 million . The Q1 2010 program consists of 18 net wells at a total capital cost to drill, complete, equip and tie-in at a total capital cost of $10 million . The programs are expected to result in 5 to 5.5 mmcf/d of incremental daily production.

"Proceeds from our proposed equity offering will allow us to reduce leverage on our balance sheet while at the same time kick start our production growth with increased drilling activity" said Doug Dafoe President and CEO. "Our Horseshoe Canyon resource play and extensive drilling inventory are ready to resume our historical growth profile in an improving natural gas market."

Closing of the Offering is subject to certain conditions, including, but not limited to, receipt of all necessary securities regulatory approvals (including the approval of the Toronto Stock Exchange).

Operational Update

Ember expects to release its full Q3 2009 operational and financial results on November 6, 2009 . The Company announces the following key Q3 2009 operational and financial result estimates:

    
    -------------------------------------------------------------------------
                                           Three        Three
                                          months       months     Percent
                                           ended        ended      Change
                                        September    September
                                         30, 2009     30, 2008
    -------------------------------------------------------------------------
    Daily average gas production
     (mcf/d)                                24,500       13,715           79
    -------------------------------------------------------------------------
    Capital expenditure additions (000s)    $2,700       $9,046          (70)
    -------------------------------------------------------------------------
    Property dispositions (000s)              $600           $0          N/A
    -------------------------------------------------------------------------
    Wells drilled (gross / net)          8.0 / 4.8  31.0 / 25.1   (74) / (81)
    -------------------------------------------------------------------------
    Net bank debt and working
     capital deficit (000s)                $97,000     $102,473           (5)
    -------------------------------------------------------------------------
    Shares outstanding (000s)               51,367       51,367            0
    -------------------------------------------------------------------------
    

During the third quarter 2009 Ember issued 1,596,500 share options at a weighted average exercise price of $0.71 . After deduction of minor cancellations in the quarter, the outstanding balance of share options at September 30, 2009 was 4,328,250 with a weighted average exercise price of $3.31 .

During the third quarter 2009 all 460,000 remaining performance shares expired unexercised leaving no performance shares outstanding at September 30, 2009 .

Hedging Program Update

During the third quarter of 2009, Ember adopted a hedging policy designed to achieve the goals of maintaining budgeted levels of cash flow, capital expenditure programs and reducing balance sheet risk. The Company is currently producing approximately 24,500 mcf/day and anticipates hedging up to 50% of its daily production.

Throughout the summer of 2009, the Company monitored natural gas spot and futures prices seeking appropriate price levels to enter into contracts. In late September and early October, Ember entered into contracts to forward sell AECO natural gas. The Company believes that natural gas markets are moving towards a more balanced condition as evidenced by the recovery in spot and future prices over the past few weeks. Currently, the Company's hedging program is short term in nature and is designed to ensure certain activity levels prior to spring break-up. The Company may elect to enter into longer dated hedge contracts in the future. To date the Company has entered into a number of contracts summarized as follows:

    
    1.  November 2009 - 4,000 GJ/day at a fixed price of $4.73 per GJ.
    2.  December 1, 2009 to February 28, 2010 - 12,000 GJ/day at a weighted
        average fixed price of $5.33 per GJ.
    

Credit Facility Update

The Company and its lenders have recently agreed to certain amendments to the Company's revolving credit facility. Under the amended revolving credit facility, which is conditional on closing of the Offering raising a minimum of $20 million , the size of the revolving credit facility has been reduced to $92 million in aggregate, which consists of a $5 million working capital facility and an $87 million production facility. The revolving credit facility's interest rates are based on either Canadian prime rate, banker's acceptance rates or London Interbank Offer Rates ("LIBOR") at the Company's option, subject to certain basis point or stamping fee adjustments depending on the Company's funded debt to trailing cash flow ratio. The revolving credit facility will remain collateralized by a $250 million demand fixed and floating debenture over all of the Company's assets. Various borrowing options are available under the amended revolving credit facility, including Canadian prime rate based advances, banker's acceptance loans and U.S. dollar based LIBOR loans. The amended revolving credit facility has a term out provision providing for conversion of drawn portions of the production facility into a one year non-revolving term loan should the lending syndicate choose not to extend the revolving period after April 30, 2010 . Under the terms of the amended revolving credit facility the next scheduled review of the Company's borrowing base will be April 30, 2010 .

    
    Outlook

    -   Ember continues to focus on development of its CBM properties and
        generating cost efficiencies on its core properties located on trend
        with the Horseshoe Canyon coals in Alberta.

    -   Ember's low cost structure generates one of the highest netbacks for
        natural gas production in Western Canada.

    -   Base production remains stable as evidenced by the low rate of
        decline in the third quarter 2009 despite no new drilling and minimal
        capital maintenance costs.

    -   A large number of locations are drill-ready for when natural gas
        prices and cash flow improve. Easy access to surface leases and
        existing infrastructure allow Ember to have new wells drilled and
        producing within six weeks.
    

Reader Advisories

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdictions. The Common Shares offered will not be registered under the 1933 Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements of the 1933 Act and applicable state securities laws.

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements including future production, anticipated levels of bank debt, hedging strategy, anticipated funds from operations, anticipated capital expenditures and development plans. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (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, and health, safety and environmental risks), commodity prices and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward looking statements and accordingly, no assurances can be given that any of the events anticipated by the forward looking statements will transpire or occur. Except as required by law, Ember undertakes no obligation to update or revise any forward-looking statements. Additional information on these and other factors that could affect the Company's operations or financial results are included in the Company's filings with Canadian securities regulatory authorities.

BOE Disclosure: Disclosure provided herein in respect of barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Ember Resources Inc. is a resource company specializing in coalbed methane (CBM) with extensive land and resource holdings in Alberta, Canada . Ember's shares are traded on the Toronto Stock Exchange under the trading symbol "EBR".

For further information: Mr. Douglas A. Dafoe, President & CEO, Ember Resources Inc., Telephone: [phone], Facsimile: [phone]; Mr. Terry S. Meek, Executive Vice-President & COO, Ember Resources Inc., Telephone: [phone], Facsimile: [phone]; Mr. Bruce C. Ryan, Vice-President Finance & CFO, Ember Resources Inc., Telephone: [phone], Facsimile: [phone]