Bonavista Energy Corporation (TSX:BNP) announce that it has entered into an agreement to acquire certain natural gas weighted properties located within its deep basin core area in west central Alberta.

The acquisition has an effective date of July 1, 2012 and is expected to close on or about October 1, 2012 for an estimated purchase price at closing of $155 million.

The acquisition is consistent with Bonavista's strategy of acquiring high quality, multi-zone oil and natural gas assets with significant low risk development opportunities and extensive gathering, compression and processing infrastructure. At closing, production from the Acquired Properties is estimated to be 6,700 boe per day (94% natural gas).

The Acquired Properties are situated on approximately 113,000 net acres of land located adjacent to Bonavista's existing deep basin land position in west central Alberta. Bonavista has identified approximately 27 high impact horizontal drilling locations offering the potential to significantly enhance production and resource recovery.

The primary zones include the Wilrich and Bluesky as well as several secondary horizons such as the Rock Creek, Notikewin, Gething, Cadomin and Second White Specs. In addition, the Acquired Properties offer numerous low risk vertical drilling locations and recompletion opportunities with a predictable, low cost production base that is well positioned for a gradual improvement in natural gas prices.

In conjunction with the acquisition, Bonavista has entered into an agreement to sell, on a bought deal basis, 18,200,000 common shares at a price of $16.50 per Common Share for gross proceeds of $300,300,000 to a syndicate of underwriters co-led by TD Securities Inc. and CIBC World Markets Inc. and including RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., Scotia Capital Inc., National Bank Financial Inc., Peters & Co. Limited, FirstEnergy Capital Corp., Macquarie Capital Markets Canada Ltd. and HSBC Securities (Canada) Inc.

Completion of the Offering is subject to certain conditions including normal regulatory and stock exchange approvals. The Common Shares will be offered in all provinces of Canada, except Quebec, by way of a short form prospectus. The closing of the Offering is expected to occur on or about September 18, 2012.

TD Securities Inc. and CIBC World Markets Inc. acted as advisors with respect to financial matters.