ST. JOHN'S, NEWFOUNDLAND--(Marketwire - June 6, 2011) -
NWest Energy Corp. ("NWest" or the "Company") (
News -
Market indicators), an oil and gas exploration company with licences offshore western Newfoundland, announces the results of a resource evaluation of the Company's four Exploration Licences offshore western Newfoundland carried out by AJM Petroleum Consultants ("AJM"), Calgary, Alberta. The report was commissioned by NWest to estimate the full potential of the Unconventional Resources and assist the Company in seeking Joint Venture partners. The full report will be available on the Company's webpage (
www.nwestenergy.com).
The AJM report summarizes the range of probabilistic estimates of Oil-in-Place resources within the Late Cambrian to Lower Ordovician age, Cow Head Group of Formations, specifically the Green Point shale. The Green Point shale is the proven source rock for the Anticosti Basin onshore and is present in the Humber Arm allochthonous sedimentary rocks. The evaluation of the unconventional shale resource by AJM has relied upon experience gained in evaluation of the unconventional Green Point shale in the Port au Port area of Western Newfoundland, Canada, as well as other shale oil and gas reservoirs in western Canada.
NWest holds four exploration licenses covering more than 1.6 million acres that is partially underlain by the Green Point shale. NWest has been able to use offshore seismic surveys to interpret the areal extent of a thrust package over an area of approximately 395,000 acres extending from south to north immediately adjacent to the shoreline within all four exploration licenses as prospective for oil in the shallow shales of the Cow Head Group (Green Point Formation). As such, the unconventional potential may be tested by drilling from onshore locations into the adjacent offshore area.
All resources in- place for the Green Point shale, within the four evaluated Exploration Licenses, have been considered Undiscovered due to lack of drilling and testing of the offshore area. Estimated recoverable resources are therefore defined as Prospective Resources. The following tables summarize the Unrisked Estimated Undiscovered Petroleum Initially-in-Place and Estimated Prospective Resources for oil within the Cow Head Group/Green Point shale horizon, within Exploration Licences 1097, 1098, 1103 and 1104:
Estimated Undiscovered Petroleum Initially-in-Place (millions of stock tank
barrels - MMstb)
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Low Best High
(MMstb) (MMstb) (MMstb)
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1097 1,451 3,475 8,324
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1098 2,006 4,808 11,521
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1103 1,974 4,761 11,479
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1104 1,350 3,089 7,070
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Total 11,840 18,841 30,369
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Estimated Prospective Resources (millions of stock tank barrels - MMstb)
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Low Best High
(MMstb) (MMstb) (MMstb)
----------------------------------------------------------------------------
1097 56.2 141.1 354.6
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1098 77.7 195.3 490.8
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1103 76.5 193.4 488.7
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1104 52.1 125.5 302.4
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Total 478.9 782.3 1,280.2
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Values may not add due to statistical aggregation methods and rounding.
The consultants have noted the above estimate of remaining recoverable resources includes prospective resources that have not been adjusted for risk, based on the chance of discovery or chance of development. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development. Actual recovery is likely to be less and may be substantially less or zero. The four evaluated offshore blocks are estimated to contain significant undiscovered resources in-place with relatively low recovery factors expected (under five percent). Drilling and testing of wells on these licenses will be required in ordered to reclassify these resources to the Discovered and Contingent categories. There is no certainty that it will be commercially viable to produce any portion of the resources.
In the course of the evaluation, NWest provided AJM with basic information which included ownership and well information, reservoir and geologic studies. Other geological data required to conduct the evaluation and upon which the report is based was obtained from public records, other operators and from AJM non-confidential files.
NWest will be actively evaluating their joint venture options regarding further exploration and determination of resource potential. The Green Point unconventional resource exploration program is at an early stage; significant work is required to determine the potential for commercially viable resource recovery.
The Company's four Exploration Licences are in good standing until January 15, 2012. All of the licences are eligible for Period II extensions for those licences upon which a well is drilled. These wells may consist of onshore to offshore drilling to test near shore targets. The Company faces many constraints to advance this project which include Exploration Licence expiry deadlines, environmental approvals, financing, joint venture partner interest and equipment availability.
We Seek Safe Harbour.
About NWest Energy
NWest Energy is a Canadian junior oil and gas company exploring off the west coast of Newfoundland and Labrador. NWest holds approximately 1.6 million acres of prospective frontier property in the Anticosti basin in a geologically favourable environment for exploration. Further information regarding the Company and its exploration licences is available at
www.nwestenergy.com.
- Undiscovered Petroleum Initially-In-Place (equivalent to undiscovered resources) is that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered.
- Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub-classified based on project maturity.
- The resource numbers are categorized as "Low", "Best" and "High" high estimates, which are the result of probability analysis to capture the uncertainty inherent in reservoir parameters. In the case of Low Estimate, these should be at least a 90% probability (P90) that the qualities actually recovered will equal or exceed the estimate. In the Best Estimate, there should be at least a 50% probability that the qualities actually recovered will equal or exceed the estimate. Similarly, in the case of the High Estimate, there should be at least a 10% probability (P10) that the qualities actually recovered will equal or exceed the estimate. As defined by the Canadian Oil and Gas Evaluation Handbook, the P50 estimate is the "best estimate" for reporting purposes.
Cautions:
AJM cautions that their report contains forward looking statements. Information concerning resources may also be forward looking, as estimates imply that the resources described can be profitably produced in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause the actual results to differ from those anticipated. These risks include, but are not limited to: the underlying risks of the oil and gas industry (i.e. operational risks in development, exploration and production; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of resources estimates; the uncertainty of estimates and projections relating to costs and expenses, political and environmental factors) and commodity price and exchange rate fluctuation.
Recommendation:
For greater understanding, it is recommended that the AJM report be read in its entirety. As stated above it may be accessed on the Company website (
www.nwestenergy.com).
Forward Looking Statements
This press release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of Canadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking information typically contains statements with words such as "anticipate", "believe", "plan", "continuous", "estimate", "expect", "may", "will", "project", "should", or similar words suggesting future outcomes . In particular, this press release contains forward-looking statements pertaining to the following: the characteristics of the Green Point shale as a potential shale oil producing formation, further exploration and determination of resource potential, and optimization of shareholder value from ongoing programs.
Undue reliance should not be placed on forward-looking statements, which are inherently uncertain, are based on estimates and assumptions, and are subject to known and unknown risks and uncertainties (both general and specific) that contribute to the possibility that the future events or circumstances contemplated by the forward-looking statements will not occur. These factors include, but are not limited to: risks associated with oil and gas exploration, financial risks, substantial capital requirements, bank financing, government regulation, environmental, prices, markets and marketing, variations in exchange rates and hedging. Further information regarding these factors may be found under the headings "Financial Risk Factors" and "Business Risks" in NWest's most recent management's discussion and analysis. Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. There can be no assurance that the plans, intentions or expectations upon which forward-looking statements are based will in fact be realized. Actual results will differ, and the difference may be material and adverse to NWest and their respective shareholders.
Forward-looking statements are based on NWest's current beliefs as well as assumptions made by, and information currently available to, NWest concerning anticipated financial performance, business prospects, strategies, regulatory developments, future natural gas and oil commodity prices, exchange rates, future production levels, the ability to obtain equipment in a timely manner to carry out exploration and development activities, the ability to market any future production successfully to new customers, the impact of increasing competition, the ability to obtain financing on acceptable terms, and the ability to add production and reserves through exploration and development activities. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. The forward-looking statements contained in this press release are made as of the date hereof and NWest does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, except as required by applicable law. The forward-looking statements contained herein are made as at the date hereof and are expressly qualified by this cautionary statement.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OF THIS PRESS RELEASE.
NWest Energy Corp.
Robert D. Webb
President & CEO
(709) 722-3757
info@nwestenergy.com
www.nwestenergy.com 
