Desmarais Provides Update on Creditor Settlement and Entering into of a Consulting Arrangement

    




 TSX Venture Exchange Symbol: DES 

 CALGARY, Jan. 11, 2012 /CNW/ - Desmarais Energy Corporation   (the "Corporation" or "Desmarais") announces that the dispute period applicable to Desmarais' creditor  proposal under the Bankruptcy and Insolvency Act (Canada) (the "Proposal") has now expired and that no notices of dispute were received by  Desmarais.  Accordingly, the Corporation has now applied to the TSX  Venture Exchange (the "TSXV") for approval for the issuance 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 are to be  issued under the Proposal in satisfaction of approximately $2,072,830  of unsecured debt (the "Settled Debt") of Desmarais. The payment of all consideration to creditors under the  Proposal is 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, are  required to be 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.  A copy of  the Proposal has been filed on Desmarais' SEDAR profile and is  available for viewing at www.sedar.com. 

 The Corporation also announces that it has retained Mr. James Long (the  "Consultant"), the former President and CEO, and currently a director, of  Desmarais, on a consulting basis to assist the Corporation with its day  to day operations, going forward. Subject to the receipt of all  applicable regulatory approvals, including the approval of the TSXV,  Desmarais has agreed to issue to the Consultant, as a one-time,  incentive consulting payment, an aggregate of 4,452,082 Common Shares  at a deemed price of $0.08 per Common Share. The agreement between the  Consultant and Desmarais further provides for a fixed term, expiring on  June 30, 2012 (subject to extension), the payment of a cash amount to  the Consultant for each day that services are provided and other  customary terms and conditions. 

 Upon the issuance of the Payment Shares in satisfaction of the Settled  Debt and issuance of Common Shares to the Consultant, Desmarais will  have approximately $2,000,000 of secured debt and approximately 57,444,340 Common Shares outstanding. 

 Pursuant to the Proposal and the above described consulting arrangement,  Desmarais expects to issue the following number of Common Shares to  persons who are currently directors of the Corporation (or to companies  controlled or directed by such persons): 8,765,475 Common Shares to  Doug Robinson, Desmarais' interim President and Chief Executive Officer  and a director; 5,668,243 Common Shares to James Long, a director of  the Corporation; and 100,781 Common Shares to Sue Anne Davis, a  director of the Corporation. 

 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 number of Common Shares  issuable pursuant to the Proposal and the consulting arrangement, the  status and amount of both secured and unsecured debt, the effect of the  Proposal under the Bankruptcy and Insolvency Act (Canada) on the  Corporation and the Corporation's expectations regarding the same.  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. The effect of the  Proposal and related matters are subject to a number of conditions  which Desmarais cannot give any assurance that such conditions will be  met on a timely basis, or if at all, as certain of the conditions are  in the control of other parties. 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:  the protections under the BIA are available to Desmarais and Desmarais  proper identification and classification of its debts. 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. 

 Neither TSX Venture Exchange nor its Regulation Services Provider (as  that term is defined in the policies of the TSX Venture Exchange)  accepts responsibility for the adequacy or accuracy of this release. 

Desmarais Energy Corporation


CONTACT:  Doug Robinson, Interim President and Chief Executive OfficerDesmarais Energy CorporationTel: [phone] / Fax: [phone]E-mail:  [e-mail]: www.desmaraisenergy.com 


    

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