BPI Industries Closes US$30 Million Private Equity Financing; Offering to Finance Additional Gas Wells Oversubscribed.

CLEVELAND -- BPI Industries Inc. (BPI) (TSX VENTURE:BPR) today announced that it has closed a private equity placement with net proceeds to BPI of approximately US$28 million to finance development of its coalbed methane (CBM) projects in the Illinois Basin. Under the terms of the offering the company issued 18 million new common shares priced at CDN$2.00. No warrants or other securities were issued in this offering. KeyBanc Capital Markets and Sanders Morris Harris served as co-placement agents in the offering and received commissions totaling eight percent of the gross proceeds. Five institutional investors participated in the offering, which was oversubscribed compared with the original target size of US$20-25 million.

The shares are subject to a four-month holding period in accordance with TSX Venture Exchange rules and cannot be sold (without exemption) in Canada through the TSX or otherwise until January 24, 2006. The shares have not been registered under the Securities Act of 1933 and may not be offered and sold in the United States absent registration or an applicable exemption from the registration requirements. The company has agreed to file a Form S-1 Registration statement with the Securities and Exchange Commission to enable the resale of shares. In addition, BPI has agreed to use its best efforts to list the shares on a U.S. market or exchange.

"Today's closing represents a significant milestone in our mission to further develop and prove up greater portions of our mineral rights," stated James Azlein, president and chief executive officer of BPI Industries. "This financing -- our second in the past nine months -- enables us to accelerate our aggressive well-drilling schedule. All of our wells that have initiated production continue to ramp up gas flow rates consistent with projections."

Azlein continued, "Our objectives for the coming months include continuing our vertical well program and completing our first pilot horizontal wells utilizing BHP Billiton's horizontal CBM drilling technology. We anticipate that by April of next year we will have drilled more than 140 vertical development wells, seven additional test wells, and nine pilot horizontal wells."

The company also announced today that it has granted, pursuant to its current stock option plan, 495,000 options to directors, officers, and employees of the company. These options are exercisable at a price of CDN$2.05 per share for a period of five years, expiring September 23, 2010.

About BPI Industries Inc.

BPI Industries Inc. (BPI) is a publicly traded independent energy company engaged in the exploration, production and commercial sale of coalbed methane (CBM) in the Illinois Basin. The company currently controls the dominant CBM acreage position in the Illinois Basin, which covers approximately 60,000 square miles in Illinois, southwestern Indiana and northwestern Kentucky.

This press release is not an offer to sell or the solicitation of an offer to buy any of BPI's securities in any jurisdiction. Any such offer or solicitation will be made only in accordance with the requirements of the Securities Act of 1933, as amended. The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Some of the statements contained in this press release may be deemed to be forward-looking in nature, outlining future expectations or anticipated operating results or financial conditions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results or conditions to differ materially from the information expressed or implied by these forward-looking statements. Some of the factors that could cause actual results or conditions to differ materially from the company's expectations include: (1) failure to become listed on a U.S. market or exchange due to BPI's inability to satisfy listing requirements; (2) inability to obtain financing to fund its future plans of operations; (3) failure of wells drilled by BPI to be commercially productive; (4) unexpected drilling conditions; (5) inability to obtain drilling equipment; (6) inability to maintain acreage rights in the Illinois Basin or to avoid disputes over the extent of its property rights; and (7) an unexpected decline in natural gas prices. Any forward-looking statements made by the company in this press release or elsewhere are based on currently available information and speak only as of the date hereof and thereof. You are cautioned not to place undue reliance on these forward-looking statements. Except as required by applicable law, the company undertakes no duty to update these forward-looking statements due to new information or as a result of future events.

News releases and other information on the company are available on the Internet at: http://www.bpi-industries.com.