Velo files preliminary prospectus for financing

2009-10-15 18:53 PT - News Release

Mr. Arthur Millholland reports

VELO FILES PROSPECTUS TO FUND NORTH SEA OPERATIONS

Velo Energy Inc. has filed a preliminary prospectus today with the securities regulatory authorities in each of the provinces of Canada other than Quebec in connection with a best-efforts offering of common shares of the company. GMP Securities LP and Canaccord Capital Corp. will act as the lead agents, with a syndicate of agents including Mirabaud Securities LLP, Genuity Capital Markets and Scotia Capital Inc. The size of the offering and pricing of the common shares will be determined once the company and the agents conclude marketing activities, with closing currently anticipated to occur on or about Nov. 17, 2009.

The funds will be used to acquire, appraise and develop the assets to be owned by Velo's wholly owned subsidiary, North Sea Oil Exploration Ltd., as a result of the sale and purchase agreement previously announced in Stockwatch on Oct. 7, 2009, for interests in the Caledonia, Sheryl and Catcher properties, and also a letter of intent for an interest in the Banks discovery. All of these properties are located in the U.K. North Sea and the acquisitions remain subject to certain conditions precedent including financing and regulatory approvals in Canada and the United Kingdom.

The offering is subject to certain conditions including, but not limited to, the execution of a definitive agency agreement with the agents and the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and the applicable securities regulatory authorities. The filed preliminary prospectus can be viewed at SEDAR.

We seek Safe Harbor.