Legend Oil and Gas Ltd. Enters Into New Equity Financing

SEATTLE, May 23, 2012 /PRNewswire/ -- Legend Oil and Gas Ltd. (OTCBB: LOGL) ("Legend", the "Company") is pleased to announce it has entered into a new equity financing with Lincoln Park Capital ("LPC") of Chicago, IL.  Upon signing the agreements, LPC made an initial purchase of 192,308 shares of common stock for $50,000 at a price of $0.26 per share ("Initial Purchase").  Upon filing the registration statement, LPC will purchase another $50,000 at a price based off of market prices with no discount and after the SEC has declared effective the registration statement related to the transaction, LPC will purchase an additional $100,000.  Thereafter, the Company will have the right, at its sole discretion, to sell up to an additional $10.0 million shares of common stock to LPC over a 36-month period, subject to satisfaction of certain conditions as set forth in the Purchase Agreement.  For each purchase notice, the Company can sell up to 250,000 shares of its common stock to LPC as often as once every three business days, the total value of which is not to exceed $1 million per notice.

Marshall Diamond-Goldberg, President of Legend stated, "This agreement should help the Company to refocus on production efforts, and helps to give us the flexibility to evaluate acquisition opportunities in our core areas while at the same time assisting us in reducing our bank debt.  The agreement contains no fixed discount rate to the Company's shares and gives Legend significant control as to the timing and price at which it sells shares under the agreement.  This financing supports the Company in executing its business objectives while growing shareholder value."

The purchase price of the shares related to the future funding, after the SEC has declared effective the registration statement, will be based on the prevailing market prices of the Company's shares at the time of sales, without any fixed discount.  Specifically, the price will equal the lesser of (a) the average three closing trading prices of the common stock during the 12 trading days prior to the purchase notice, or (b) the lowest intra-day trading price of the common stock on the date of the purchase notice.  The Company has the right, and not the obligation, to exercise its rights under the Purchase Agreement to sell shares to LPC and as such the Company will control the timing and amount of any such sales.  LPC shall not have the right or the obligation to purchase any shares of Company common stock on any business day that the price of the common stock is below the floor price as set forth in the Purchase Agreement.

In consideration for entering into the Purchase Agreement, the Company issued 723, 592 shares of common stock to LPC as an initial commitment fee.  Up to an additional 1,072,183 shares of common stock may be issued pro rata to LPC as an additional commitment fee as LPC purchases additional shares of common stock under the Purchase Agreement.  The Purchase Agreement may be terminated by the Company at any time at its discretion without any cost.  The proceeds received by the Company under the Purchase Agreement will be used to fund its working capital needs, including repayment of bank indebtedness.

About Legend Oil and Gas Ltd.

Legend Oil and Gas Ltd. is a managed risk, oil and gas exploration/exploitation, development and production company with activities currently focused on leases in Canada, southeastern Kansas and northern North Dakota.

Investor Contact
Barry Gross, Investor Relations
[email protected]
361-949-4999

Forward-looking Statements:

This press release contains forward-looking statements concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Forward looking statements in this press release include statements about our drilling development program.  These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the Company's ability to satisfy applicable closing conditions under the Purchase Agreement and LPC's compliance with its obligations to purchase the shares of common stock, changes in the trading prices of our common stock, and the timing and amount of funding available under the Purchase Agreement, and our use of net proceeds therefrom, to fund our working capital needs and our 2012 drilling and development plan.  Additional factors include increased expenses or unanticipated difficulties in drilling wells, actual production being less than our development tests, changes in the Company's business; competitive factors in the market(s) in which the Company operates; risks associated with oil and gas operations in the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.

Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as "probable," "possible," "recoverable" or "potential" reserves among others, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our filings with the SEC.

SOURCE Legend Oil and Gas Ltd.