Rock Energy Inc. Announces $10.0 Million Bought Deal Financing

CALGARY, ALBERTA--(Marketwired - Feb. 3, 2015) -

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Rock Energy Inc. ("Rock" or the "Company") (TSX:RE) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Dundee Securities Ltd. and including Acumen Capital Finance Partners Limited, AltaCorp Capital Inc., FirstEnergy Capital Corp., Haywood Securities Inc., National Bank Financial Inc., Paradigm Capital Inc. and GMP Securities L.P. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase for resale to the public, on a bought deal basis, 4,260,000 common shares of the Company ("Common Shares"), at a price of $2.35 per Common Share for aggregate gross proceeds of $10.0 million (the "Offering"). The Underwriters will have an option to purchase up to an additional 15% of the Common Shares issued under the Offering at a price of $2.35 per Common Share to cover over-allotments, exercisable in whole or in part at any time until 30 days after the closing date of the Offering. The maximum gross proceeds that could be raised under the Offering is approximately $11.5 million should the over-allotment option be exercised in full.

It is anticipated that certain members of the Board and Management of Rock intend to participate in the Offering for approximately 10% of the gross proceeds of the Offering.

The net proceeds from the Offering will be initially used to temporarily reduce indebtedness, partially finance the Company's 2015 capital expenditure program and for general corporate purposes.

The Offering will be completed by way of short form prospectus in certain provinces of Canada, except Québec, and on a private-placement basis in the United States pursuant to exemptions from the registration requirements of the U.S. Securities Act of 1933, as amended. The Offering is subject to normal regulatory approvals and is expected to close on or about February 25, 2015.

Rock is re-affirming its full year 2015 capital program of $25.0 million and anticipated production range of 4,600 - 5,000 boe/d, as announced in the Company's press release dated January 25, 2015. The conservative and prudent capital program combined with the increased financial flexibility achieved with the Offering is expected to continue to allow Rock to remain flexible to react to changing oil prices. For the present time, Rock's leadership team is focused on maximizing our operating netback, managing the balance sheet and continuing to build its inventory of efficient oil focused opportunities.