NEWS
RELEASE
August 23, 2007
PEARL ANNOUNCES THE
ACQUISITION OF A LARGE HEAVY OIL PROJECT IN ALBERTA
CALGARY, ALBERTA
- Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX
Venture: PXX and First North: PXXS) announces that in conjunction with its
Joint Venture partner, Serrano Energy Ltd. (“Serrano”), the Company
has acquired a 35% working interest in 2,816 contiguous hectares of oil sands
leases located south of Fort McMurray, in the Athabasca Oil Sands region of
northern Alberta. The Athabasca Oil Sands comprise what is considered one
of the largest oil deposits in the world and is the heart of Canada’s oil industry.
DeGolyer and MacNaughton
Canada Limited, independent reserves evaluator, prepared a report in accordance
with National Instrument 51-101 guidelines on these Alberta oil sand leases with an effective
date of December 31, 2006. In this report DeGolyer
and MacNaughton estimated that Pearl’s
working interest share of possible oil reserves within these leases was
approximately 88 million barrels of possible recoverable oil reserves,
effectively tripling Pearl’s
possible reserves. The 10% discounted value for these newly acquired
reserves is approximately CAD$105,000,000 (net to Pearl) using forecast pricing and before
taxes.
Through its 28.27% ownership in Serrano, Pearl has an additional indirect ownership of
24.8 million barrels of possible oil reserves and an additional 10% discounted
value for these reserves of approximately $29,683,500.
The Company has plans to drill one appraisal well this winter and is in
the process of preparing an application for required governmental approvals of
a thermal pilot project utilizing SAGD technology. Upon confirmation of
positive results from this appraisal well, Serrano as operator plans to
initiate the SAGD single well pair pilot project commencing in the fall of
2008, pending regulatory approvals. Estimated drilling and facility costs
of the SAGD pilot project are estimated to be $15,000,000 ($5,250,000 net to Pearl).
For the balance of 2007 Pearl and Serrano
have plans to drill up to 50 additional wells in their Joint Venture heavy oil
conventional focus area in Saskatchewan,
commencing in early September.
Pearl President and CEO Keith Hill
stated “We are very pleased to add this large scale heavy oil property to
Pearl’s portfolio as a result of our investment in Serrano. We will
aggressively pursue the SAGD pilot project which is the key to moving the
possible reserve numbers into a proven and probable category.”
Pearl is a public company focused on
delivering disciplined growth by establishing a North American portfolio of oil
and gas projects with an emphasis on large resource opportunities.
Additional information on Pearl
is available on our website at www.pearleandp.com.
The company’s Certified Advisor on First
North is E. �hman J:or Fondkommission
AB.
All references in this release to boe's are
based on a 6 to 1 conversion ratio. Boe's may be
misleading, particularly if used in isolation. A boe
conversion of 6 Mcf:1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Significant Assumptions and Uncertainties:
The preceding information presents values that are estimated for
possible reserves (as defined in the Canadian Oil and Gas Evaluation Handbook)
using costs and prices in C$ obtained from sources considered to be reasonable
by the Corporation and the reserves evaluator, DeGolyer
and MacNaughton.
Possible reserves are those additional reserves that are less certain to
be
recovered than probable reserves. There is only a 10% probability that the
quantities actually recovered will equal or exceed the sum of the proven
plus probable plus possible reserves.
The process of estimating reserves is complex requiring significant
judgments and decisions based on available geological, geophysical, engineering
and seismic data. Although every reasonable effort is made to ensure that
reserve estimates are accurate, reserve estimation is an inferential science.
As a result, the subjective decisions, new geological or production information
and a changing environment may impact these estimates and the impact could be
material.
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.
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
|
Arlene Weatherdon - Chief Financial Officer
Tel.: (403)
716-4054
Fax:
(403) 265-8324
E-mail:
arlene.weatherdon@pxx.ca
|
Sophia Shane – Corporate Development
Tel.: (604) 689-7842
Fax: (604) 689-4250
E-mail:
sophias@namdo.com
|
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.