ProspEx To Acquire Ricinus Area Assets

ProspEx Resources Ltd. has entered into an agreement to acquire certain liquids-rich natural gas assets in the company's core operating area at Ricinus, Alberta for $11.75 million, subject to normal closing adjustments.

These assets consist of 16 (11.9 net) wells with current production of approximately 360 bbls of oil equivalent (BOE) per day, along with associated gas gathering and field compression facilities. The acquisition has an effective date of Dec. 1, with closing expected to occur on or about Jan. 22, 2008. The acquisition will consolidate ProspEx's interests in the Ricinus area where it has enjoyed drilling success over the past two years. The company has interests in 11 of the 16 wells included in the acquisition, and will assume operatorship of gathering and compression facilities in the area upon closing. ProspEx has identified four (2.6 net) potential additional drilling locations on the acquired lands;

Current production is estimated at approximately 360 BOE per day, comprised of 76% natural gas and 24% oil and natural gas liquids resulting in an acquisition price of $32,600 per BOE of daily production.

McDaniel & Associates Consultants Ltd. evaluated the reserves on behalf of the vendor effective Dec. 31, 2006 and they were mechanically updated to June 30, 2007. Proved plus probable reserves as of June 30 were estimated to be 940,000 BOE, said ProspEx which estimates that production from that date to the Dec. 1, 2007 effective date of the acquisition was approximately 60,000 BOE, leaving approximately 880,000 BOE of reserves;

ProspEx will finance the purchase from its credit facility. It anticipates that the acquired assets will support an expansion of the company's existing credit facility to $65 million from $60 million.

The company earlier announced that it has closed its previously announced private placement of 2.12 million flow-through common shares at a price of $3.70 per share.

The underwriting syndicate was led by Peters & Co. Limited and included CIBC World Markets Inc., Cormark Securities Inc., FirstEnergy Capital Corp., Raymond James Ltd., TD Securities Inc., and Tristone Capital Inc.

ProspEx will use the proceeds from the offering to incur Canadian exploration expenses. These qualifying expenditures will be renounced to subscribers for the 2007 tax year and are to be incurred by Dec. 31, 2008.

After giving effect to the offering, ProspEx has 56,453,422 common shares issued and outstanding.