Mission Oil & Gas Inc. Announces $12.3 Million Bought Deal Financing

Release Date: June 17, 2005
08:43 EDT Friday, June 17, 2005

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CALGARY, June 17 /CNW/ – Mission Oil & Gas Inc. (“Mission” or “the Company”) (TSX – MSO) is pleased to announce that it has entered into a bought deal financing agreement with a syndicate of underwriters co-led by GMP Securities Ltd. and Orion Securities Inc. and including Tristone Capital Inc., CIBC World Markets Inc., BMO Nesbitt Burns Inc., FirstEnergy Capital Corp., and Haywood Securities Inc., to issue 1,500,000 common shares on a private placement basis at a price of $8.20 per share for gross proceeds of $12,300,000. In addition the syndicate has been granted an option exercisable prior to closing of up to an additional 500,000 common shares at a price of $8.20 per share for gross proceeds of $4,100,000 which would increase the total offering to $16,400,000.

The common shares issued pursuant to the private placement will be subject to a four month hold from the date of closing of the private placement. Closing of the private placement is scheduled for July 7, 2005. The transaction is subject to the receipt of all necessary regulatory and stock exchange approvals.

With continued successful drilling results on its Saskatchewan oil properties, Mission has revised upwards the Company’s 2005 exit production rate estimate from 1,875 Boepd to 2,100 Boepd.

Proceeds from this offering will be used to expand Mission’s development of its core properties in Alberta and Saskatchewan, continued development of its light oil Bakken play and possible strategic acquisition opportunities.

Mission is a Canadian junior oil and gas company engaged in the exploration, development and production of natural gas and light oil reserves in the provinces of British Columbia, Alberta and Saskatchewan.

Information provided herein contains forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, which are considered reasonable by Mission at the time of preparation, may prove to be incorrect. Actual results achieved will vary from the information provided and the variations may be material. There is no representation by Mission that actual results achieved will be the same in whole or in part as those indicated in the forward-looking statements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The common shares offered have not and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold in the United States except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable states securities laws

A Boe is a barrel of oil equivalent on the basis of 1 Boe to 6 Mcf of natural gas. Boe’s may be misleading, particularly if used in isolation. A Boe conversion ratio of 1 Boe for 6 Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

/For further information: please contact Trent J. Yanko, President and Chief Operating Officer, Mission Oil & Gas Inc., Suite 800, 205 – 5th Avenue SW, Calgary, Alberta, T2P 2V7, Telephone: (403) 699-2200, Fax: (403) 263-9965, www.missionoilgas.com/