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CALGARY, June 23 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company") (TSX: WAV.A and WAV.B) is pleased to announce it has entered into an agreement to acquire a 100% working interest operated property currently producing approximately 850 boe/d of natural gas and natural gas liquids in British Columbia. The current production consists of vertical wells producing from an extensive tight gas sand, with up to 55 meters of gross pay in the Triassic Doig formation. The Company plans to drill the property using horizontal multi-frac wells, similar to developments elsewhere in the Montney/Doig formations of British Columbia.

This property represents Breaker's third multi-frac horizontal resource play property, in addition to ongoing light oil success at Irricana and the Company's large tight gas resource play at Provost which will have its first horizontal well drilled later in 2008.

The total purchase price is $63.75 million (before closing adjustments) and accounting for a portion of the purchase price devoted to undeveloped land, the price paid is approximately $58.4 million. This equates to $68,652/boe/d and $17.87/boe on a proved plus probable basis, based on an NI 51-101 compliant reserve report prepared by the Company's reserve evaluators effective June 1, 2008. The acquisition is accretive on reserves per share, production per share and cash flow per share in 2008. The estimated netback based on mid-June strip prices is approximately $57.94/boe, for a recycle ratio of 3.2 times calculated on a proved plus probable reserve basis, with significant future growth potential via horizontal drilling. As a large proportion of the current reserve value is proved, Breaker's corporate lending base is expected to increase to $120 million upon closing of the acquisition.

In connection with this acquisition, Breaker has entered into an agreement with a syndicate of underwriters led by FirstEnergy Capital Corp. and including Tristone Capital Inc., Wellington West Capital Markets Inc., Blackmont Capital Inc., BMO Capital Markets, CIBC World Markets, Dundee Securities Corporation, Scotia Capital Inc., and GMP Securities L.P. to sell 3,000,000 subscription receipts for Class A Shares (the "Subscription Receipts") on a bought deal, private placement basis at an issue price of $11.50 per Subscription Receipt to raise gross proceeds of $34.5 million. Closing of the financing is expected to occur on or about July 15, 2008, subject to the satisfaction of standard conditions, including the receipt of all necessary regulatory and stock exchange approvals.

The proceeds of the offering of the Subscription Receipts will be held in escrow pending Breaker's receipt of all necessary regulatory approvals and the completion of the acquisition of the Fireweed assets. Upon these conditions being met, the proceeds of the offering of the Subscription Receipts will be released to Breaker and each Subscription Receipt will be exchanged for one Class A Share of Breaker without additional payment. If closing of the acquisition of the Fireweed assets does not take place by October 31, 2008, the holders of Subscription Receipts will be entitled to a return of their full subscription price and their pro rata entitlement to the interest earned on the escrowed funds.

This acquisition will be financed with the bought deal financing combined with the Company's bank line, which is expected to be increased to $120 million upon the closing of the acquisition.

The Fireweed Doig C pool was discovered in 2000, and partly developed over several years with a total of 22 producing vertical wells, which have recovered approximately 16 BCF to date. The acquisition includes substantially all of the pool area, including all currently producing wells. The thick sand is gas saturated throughout the area, and a large portion of the pool is undrilled.