COSTA Moves Forward with Private Placement of 1 Million Units

COSTA Energy is proceeding with a non-brokered private placement of up to 1,000,000 units at $1.00 per unit, consisting of $1.00 principal amount of secured, non-convertible debentures and 0.67 of one common share purchase warrant.

Each one Warrant will entitle the holder thereof to purchase one common share at a price of $0.15 per share until December 31, 2008. Closing of this proposed financing is anticipated to occur on or about January 15, 2008. Gross proceeds will be $1.0 million if the issue is fully subscribed, and will be used to repay $883,000 of existing debentures and for working capital purposes. The Warrants issued pursuant to this private placement will be subject to a four month statutory hold period.

Application has been made to the TSX Venture Exchange and both the offering and the pricing of the warrants are subject to TSXV approval.

Management and directors are expected to subscribe for up to $500,000 of this issue.


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