Good
morning!
Please
find enclosed a news release issued this morning. �If you have any questions or
require further information, please do not hesitate to call.
Best
regards,
Sophia Shane
Ph.
604-689-7842
NEWS RELEASE
September 6, 2007
PEARL ANNOUNCES OPERATIONS UPDATE
CALGARY, ALBERTA
- Pearl Exploration and Production Ltd. ("Pearl" or the
"Company") (TSX Venture: PXX and First North: PXXS) is pleased to provide
the following update on its operations activities in the third quarter of 2007.
Gross production for Pearl during the last week
of August averaged approximately 10,500 barrels of oil equivalent per day
(“boepd”).� Production from the previous quarter ending June 30,
2007 averaged approximately 7,910 boepd.
The Company therefore continues to
forecast gross production exit rates for 2007 in the range of 14,000 to 15,000
boepd.
Operationally, the Company has
continued to execute a 2007 work program focused on investments in core conventional
heavy oil production development projects such as Onion Lake (87.5% Working
Interest) and Mooney (98.4% Working Interest) in order to both appraise and
develop reserves.� The expectation is that significant gains will be realized
in 2007 for production, near term cash flow and net present value additions.�
Keith Hill, President and CEO of Pearl, commented, “We are pleased with progress to date on our core projects. Despite a difficult operating environment thus far this year for our industry from the standpoint of weather and service costs, we are on track to meet our aggressive production and cash flow targets for year end 2007.� These investments will position Pearl with a foundation that will allow us to take advantage of additional growth opportunities that we see emerging both this year and in 2008.”
Operations
activities in the third quarter of 2007 were focused in the following key
areas.
Onion Lake Heavy
Oil Project – Saskatchewan
The Company resumed its multi-well development
drilling program of this heavy oil trend in July 2007 with 15 wells being
drilled during the third quarter and of these, 12 have been placed on initial
production.� This brings the total number of wells drilled in 2007 to 40 wells,
with 35 wells having been placed on production. At the end of August the
Company’s gross production has increased approximately 300 boepd,
bringing the average production up to over 1,500 boepd.� Based on the positive
results and current progress of the drilling campaign thus far, the Company is
expecting to drill approximately 110 wells in the 2007 subject to regulatory
approvals and weather conditions. A well “down-spacing” application
has now received regulatory approval and will allow a total of 85 locations to
be drilled over the second half of 2007.� The Company is also beginning
construction of centralized facilities for sand and oil handling in September
2007 which will lead to operating cost reductions.� A 3-D seismic survey will
also be permitted to further evaluate the Company's southern acreage and
prioritize 2007 and 2008 development drilling locations.� A thermal recovery
pilot involving two wells will become operational in late 2007, with the
procurement and construction of pilot facilities now underway.
Mooney Heavy Oil Project – Alberta
Development drilling continued at the Mooney Bluesky
"A" oil pool throughout the summer period. As of the end of September
2007, a total of 20 new horizontal oil wells will have been drilled. �Eleven of
these new wells are currently on production and by mid September the remaining
nine horizontal wells will be brought on production. At that time there will be
a total of 32 horizontal producing wells in the field. With the Company’s
recently announced acquisition of an additional 24% Working Interest, the
Company’s gross production has increased to approximately 2,300 boepd for
the month of August.� In September this production will increase another 900
boepd, bringing the September average production up to approximately 3,200
boepd.� Development projects including water or polymer injection continue to
be evaluated and advanced.
Other Canadian Properties - Alberta, Saskatchewan
Drilling and production enhancement projects continued
on the Company's other heavy oil producing properties. Near term production
additions will be realized from a successful summer recompletions program carried
out in the Celtic area, and focused area drilling primarily in the Ear Lake / Salt Lake
region.� At Ear Lake, 4 development wells were drilled
and completed in the third quarter.� Early production testing is now underway
and results suggest that a productive geological trend has been identified.� An
additional 6 “follow up” drilling locations are being licensed for
drilling during September.� At the adjacent Reward area, 2 development drilling
locations have been licensed to offset a producing discovery well.� In the Salt Lake
area, an exploration location has been licensed for September drilling, and 3
development horizontal locations are proposed for the Lloydminster
sand in the Salt Lake pool.� The Company drilled an
additional 5 wells in the Lloydminster
area and is currently drilling a sixth well.� One of these wells, drilled in
the Standard Hill area, has discovered a new Waseca pool.�
The Company also completed the drilling of a
horizontal well in the Druid field and placed it on production in order to test
the reserves potential of this field which has the potential for a water
cycling project in the first half of 2008.� The Company also purchased an
additional 4 Sections of 100% working interest land at Druid to offset the
existing land base.� Two additional horizontal locations are proposed for
drilling in early fall.�
San Miguel Heavy Oil Project - Maverick Basin,
South Texas
The Company is continuing with the San Miguel Heavy
Oil Project's steam injection pilot operations to determine the technical and
economic feasibility of cyclic steam injection to enhance oil recovery. Both
pilot wells are presently on a third cycle of injection and production, and
additional cycles will occur throughout 2007. Following discussions with our
partners, a decision has been made to expand the current pilot prior to the end
of 2007. Initial planning and procurement is therefore underway for the
drilling of additional wells and the procurement of long-lead items for
facility modifications. Discussions and planning are also underway for a
second, 16 well production pilot project to the north of the existing steam
injection pilot facility. The production pilot is presently projected to be
operational in the second quarter of 2008.
Palo Duro Shale Gas Exploration Project
- North Texas
No additional drilling was undertaken during the
quarter ended June 30, 2007 on the Palo Duro Shale Gas Project. Efforts were
concentrated on building the required pipeline and facilities to tie-in and
test the long term performance of the two existing MacIntosh wells. The Company
will continue to monitor the results of the extended production testing as well
as the results of other operators in the basin in order to evaluate the long
term economic viability of the Palo Duro Shale Gas Project.
Pearl
also announces that it has agreed to grant an aggregate of 250,000 incentive
stock options to an officer of the Company.� The options are exercisable at a
price of $3.75 per share over a period of 5 years and are subject to vesting
provisions.
Pearl
is a public company focused on delivering disciplined growth by establishing a
North American portfolio of oil and gas projects with an emphasis on large
resource opportunities.� Additional information on Pearl is available on our website at www.pearleandp.com.
For further information, please contact:
Keith Hill - President and Chief Executive Officer
Tel.:����� (604) 689-7842
Fax:����� (604) 689-4250
E-mail:� khill@namdo.com
|
Gary Hyde - Chief Operating Officer
Tel:������ (403) 716-4063
Fax:����� (403) 261-1007
Email:�� gary.hyde@pxx.ca
|
Sophia
Shane –
Corporate Development
Tel:� �����(604) 689-7842
E-mail:� sophias@namdo.com
|
�
|
All references in this release to boe's are based on a
6 to 1 conversion ratio. Boe's may be misleading, particularly if used in
isolation. A boe conversion of 6 Mcf:1 bbl is based on an energy equivalency
conversion method primarily applicable at the burner tip and does not represent
a value equivalency at the wellhead.
Pearl’s
Certified Advisor on First North is E. �hman J:or Fondkommission AB.
Forward-looking statements:�
This document contains statements about expected or anticipated future events
and financial results that are forward-looking in nature and as a result, are
subject to certain risks and uncertainties, such as general economic, market
and business conditions, the regulatory process and actions, technical issues,
new legislation, competitive and general economic factors and conditions, the
uncertainties resulting from potential delays or changes in plans, the
occurrence of unexpected events, and the Company’s capability to execute
and implement its future plans.� Actual results may differ materially from
those projected by management.� For such statements, we claim the safe harbour
for forward-looking statements within the meaning of the Private Securities
Legislation Reform Act of 1995.
The TSX Venture
Exchange has not reviewed and does not accept responsibility for the adequacy
or accuracy of this release.