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Dune Energy Announces Sale Of 18.8 Million Common Shares At $1.60 Per Share To Raise $30 Million Of New Equity Capital

HOUSTON, Dec. 27, 2012 /PRNewswire/ -- Dune Energy, Inc. (OTCBB: DUNR) today announced it has entered into an agreement with each of its major shareholders to sell 18,749,997 new shares of common stock at $1.60 per share for total proceeds of $30 Million to be used to fund working capital for the Company's planned 2013 drilling program. Including this issuance of common stock, there are currently approximately 59 million shares outstanding.  Subject to certain conditions or upon the occurrence of certain events, Dune may issue and the major shareholders may purchase up to an additional 12.5 million shares of common stock in two equal tranches, also at $1.60 per share.

Summary Terms

Each of the Company's major shareholders, who collectively hold approximately 93% of the outstanding shares of the Company prior to the agreement, participated in the sale on a pro rata basis as to their interest prior to the issuance of the new common stock.  Under the terms of the agreement the Company may issue up to 31,250,000 shares at $1.60 per share prior to December 31, 2013.  The initial issuance on December 21, 2012 was for a cash consideration of $30 million and, depending on Dune's satisfaction of certain performance conditions relating to its drilling program, it may make up to two additional cash draws of $10 million each at the $1.60 per share price.  Total consideration to the Company, assuming all conditions of the program are achieved and additional draws made would be $50 million

In the financing, each of the investors received a "Preemptive Right" to purchase such investor's pro rata percentage of new stock or new debt financings (excluding certain reserve based revolver financings) undertaken by Dune, on substantially the same terms as offered to any outside investor.  At the expiration of the term of the agreement or upon a change of control of Dune, the investors can elect to draw down the remaining shares in the program by paying to the Company $1.60 per share for any shares remaining under the initial 31,250,000 shares allocated for issuance pursuant to the agreement. 

In connection with the financing, Dune received the right, but not the obligation, to offer Dune's non-participating shareholders the option to make a one-time proportional purchase of the Company's Common Stock at a purchase price of $1.60 per share.  The Company is also obligated to file a Shelf Registration Statement within 30 days of the closing of this agreement.  The full agreement and the Registration Rights Agreement have been filed as exhibits to an 8-K, for the Company dated December 26, 2012.

Information Provided to Major Shareholders

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