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Cabo Drilling Arranges $670K Private Placement

North Vancouver, BC:  Cabo Drilling Corp. (the “Company”) (TSX-V: CBE) is pleased to announce that, based on an unsolicited offer from significant shareholders, Loeb Aron & Company Ltd. and PanAmerica Capital Group Inc., investors represented by the two firms, together with a group of Company insiders, will invest $670,000 in the Company by way of a private placement.

As we continue to move forward with our business plan, it is imperative to know we have the support of shareholders, directors and management of our Company,” Cabo’s CEO and President, Mr. John Versfelt stated. “This unsolicited offer to participate in a private placement by individuals and groups close to the Company is extremely encouraging to me as the Company CEO and President, and it is timely, as conditions are perfect for the acquisition of new equipment, with drills currently available on the market at discount prices.”

The private placement, arranged between the Company and two of its major shareholders Loeb Aron & Company Ltd. and PanAmerica Capital Group, along with insiders of the Company, will move forward on a bought deal basis of 5,583,333 units at $0.12 per unit, for total cash proceeds of $670,000. The units comprise one (1) common share and one half (½) non-transferable share purchase warrant, each full warrant will entitle the holder to purchase an additional share for $0.15 for a period of two (2) years from the date of issuance.

The placement will be partially brokered by Loeb Aron & Company Ltd. with a minimum subscription of $250,000 and by PanAmerican Capital Group with a minimum subscription of $188,400. A number of directors and senior managers will also participate in the placement. The brokered portion is subject to a finders fee of 8.5% plus an 8.5% broker unit warrant allowing the holder to purchase broker units comprised of one share and a two year share purchase warrant exercisable at $0.15. The placement is subject to regulatory acceptance.

The Company will use the proceeds of the private placement to support the purchase of equipment and for working capital.

About Cabo Drilling Corp. (TSX-V: CBE)
Cabo Drilling Corp. is a drilling services company headquartered in North Vancouver, British Columbia, Canada. The Company provides mining related and specialty drilling services through its Canadian divisions in Surrey, British Columbia; Montréal, Quebec; Kirkland Lake, Ontario; and Springdale, Newfoundland; as well as Cabo Drilling de Mexico S.A. de C.V. of Hermosillo, Mexico; Cabo Drilling (Panama) Corp. of Panama, Republic of Panama; Cabo Drilling Spain S.L. of Sevilla, Spain; Balkan States Drilling SH.P.K. of Tirana, Albania; and Cabo Drilling (International) Inc. The Company’s common shares trade on the Frankfurt Exchange under the symbol: DHL and on the TSX Venture Exchange under the symbol: CBE.

ON BEHALF OF THE BOARD

    “John A. Versfelt”

John A. Versfelt
President and CEO

Further information about the Company can be found on the Cabo website (http://www.cabo.ca) and SEDAR (www.sedar.com) or by contacting Sheri Barton, Corporate Communications at 403-217-5830 or Mr. John A. Versfelt, Chairman, President & CEO of the Company at 604-984-8894.  For general investor relation inquiries you may also contact Renmark Financial Communications Inc.:
Barbara Komorowski: bkomorowski@renmarkfinancial.com or
Dan Symons: dsymons@renmarkfinancial.com
Tel: 514-939-3989 or 416-644-2020.

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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.  This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, potential mineral recovery processes and other business transactions timing.  Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties.  Actual results may differ materially from those currently anticipated in such statements.


 


Last Updated: 11/02/2009