Richards Oil & Gas Raises $6.5 Million from Private Placement

Richards Oil & Gas Limited has successfully competed a private placement offering of $6,500,000 principal amount of 8% unsecured convertible debentures of the Corporation maturing June 26, 2011. The Debentures accrue interest at 8% payable semi-annually. During the entire term of the Debenture, the Debenture may be converted into common shares by the Debenture holder, at escalating prices starting at $1.65 in years 1 and 2, $1.82 in year 3, $2.00 in year 4 and ending at $2.20 in year 5. The Debenture will not be redeemable at the option of the Corporation until on or before June 30, 2008. The Debenture will be redeemable at the option of the Corporation after June 30, 2008 if the average share price, over a 20-day period, equals or exceeds $3.50. All securities issued pursuant to the financing are subject to a four-month hold period.

The selling syndicate was led by Octagon Capital Corporation, as lead agent, and included Novadan Capital Ltd., Union Securities Ltd. and Dominick & Dominick Securities Inc. (collectively, the "Agents"). In connection with the financing, the Corporation granted to the Agents compensation options to acquire up to 196,970 common shares in the capital of the Corporation at a price of $1.65 per share expiring June 26, 2007. In addition, the Corporation paid the Agents a cash commission of $455,000.

The Corporation will use the net proceeds from the private placement for land acquisition, exploration and development of properties and for general corporate purposes. The completion of the private placement is subject to regulatory approval.

Richards Oil & Gas Limited is an oil and gas exploration company, based in Calgary, Alberta, that specializes in the exploration, development and exploitation of CBM properties. The Corporation's management has extensive experience in the development of CBM projects, which it is using to exploit the Corporation's land base and to add and sustain significant value for its shareholders.

The Corporation has assembled a highly prospective CBM land base, comprised of 150.1 sections of land (96,064 acres gross, approximately 48,060 acres net) and containing a portfolio of near to long-term cash flow opportunities, including prospects in the Horseshoe Canyon, Ardley and Mannville CBM coal seams.


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