Desmarais Announces Issuance of Common Shares in Settlement of Debt and Implementation of Terms of Bankruptcy Proposal

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE
UNITED STATES


Desmarais Energy Corporation (TSX VENTURE:DES) (the "Corporation" or
"Desmarais") announces that it has completed the issuance of an aggregate of
25,910,426 (the "Payment Shares") common shares of the Corporation ("Common
Shares") at a deemed price of $0.08 per share, which Payment Shares were issued
pursuant to Desmarais' previously announced proposal under the Bankruptcy and
Insolvency Act (Canada) (the "Proposal") in satisfaction of approximately
$2,072,830 of Desmarais' unsecured debt (the "Settled Debt"). The payment of all
consideration to creditors under the Proposal was subject to the withholding by
Desmarais of a levy, payable to the Office of the Superintendent of Bankruptcy
(the "Superintendent") equal to 5% of the consideration paid. Accordingly, 5% of
the Payment Shares, being approximately 1,295,520 Common Shares, have been
issued by Desmarais to the Superintendent in payment of such levy, with the
balance, an aggregate of approximately 24,614,900 Common Shares, being issued to
creditors under the Proposal. 


Desmarais has now fully implemented the terms of the Proposal made to its creditors.

The Corporation also announces that it has issued to Mr. James Long, the
Corporation's former President and CEO, and currently a director of Desmarais,
4,452,082 Common Shares at a deemed price of $0.08 per share pursuant to the
terms of the previously announced consulting agreement between the Corporation
and Mr. Long.


Subsequent to the issuance of the Payment Shares in satisfaction of the Settled
Debt and issuance of Common Shares to Mr. Long, Desmarais has approximately
$2,000,000 of secured debt and approximately 57.4 million Common Shares
outstanding.


This press release shall not constitute an offer to sell or a solicitation of an
offer to buy the securities in any jurisdiction. The common shares of Desmarais
will not be and have not been registered under the United States Securities Act
of 1933, as amended, and may not be offered or sold in the United States, or to
a U.S. person, absent registration or applicable exemption therefrom.


Reader Advisory: The press release may contain certain forward looking
statements which may include plans, expectations, forecasts, projections,
guidance or other statements that are not statements of fact, including without
limiting the generality of the foregoing, the status and amount of Desmarais'
secured debt and the pro-forma financial position of Desmarais subsequent to its
discharge from bankruptcy. Although Desmarais believes that the expectations
reflected in such forward looking statements are reasonable, it cannot give any
assurance that such expectations will prove to be correct. As such, the future
plans and objectives of Desmarais are forward looking statements that involve
risks and uncertainties that may be based on assumptions that could cause actual
results to differ materially from those anticipated or implied in such
statements. The foregoing list of risk factors is not exhaustive. Additional
information on risk factors is included in other public documents available
under Desmarais' profile on SEDAR. Although Desmarais has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in the forward looking statements, there may be
other factors that cause actions, events or results to differ from those
anticipated, estimated or intended. In making its forward looking statements,
Desmarais used, among others, the following material factors or assumptions to
develop forward looking information enumerated above: management's reasonable
estimates with regard to debt levels and working capital. Desmarais' forward
looking statements are expressly qualified in their entirety by this cautionary
statement. Unless otherwise required by applicable securities laws, Desmarais
does not intend, nor does it undertake any obligation, to update or review any
forward looking statements to reflect subsequent information, events, results or
circumstances or otherwise.