Bronco Energy Ltd.
TSX : BCF

Bronco Energy Ltd.

October 29, 2007 01:28 ET

Bronco Announces Grand Rapids Resource Estimates

CALGARY, ALBERTA--(Marketwire - Oct. 29, 2007) - Bronco Energy Ltd. ("Bronco") (TSX:BCF) has received an independent engineering resource estimate from McDaniel & Associates Consultants Ltd. ("McDaniel") prepared for the Grand Rapids Formation, on lands under lease by Bronco at Wabasca, Alberta. Low, High and Best Estimates of Discovered Resources and a Best Estimate of Bronco's share of Undiscovered Resources were prepared with an effective date of October 31, 2007.

McDaniel prepared a Best Estimate of the Discovered and Undiscovered Resources, also collectively considered to be Original Bitumen In Place, for the Grand Rapids formation. The estimates are presented in the table below (High and Low Estimates were not prepared for Undiscovered Resources as this would require rigorous geostatistical analysis):



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Category / Level of Certainty Total Lease Bronco's Share (1)
(MMBbl) (MMBbl)
---------------------------------------------------------------------------
Best Estimate Discovered
+ Undiscovered Resources 603.2 502.3
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(1) Bronco's share of recoverable volumes include the working interest
recoverable volumes before deductions of royalties payable to others.
Net recoverable volumes will be determined in conjunction with final
economics.


Discovered and Contingent Resources were assigned to the Grand Rapids pool by McDaniel as presented in the following table:



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Bronco's Bronco's
Share (1) Share (2,3) Estimated (3)
Discovered Contingent Recovery
Category / Level Resources Resources Factor
of Certainty (MMBbl) (MMBbl) (%)
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Low Estimate
Discovered Resources 249.5 74.1 30.7
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Best Estimate
Discovered Resources 263.0 87.0 37.7
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High Estimate
Discovered Resources 303.4 101.6 41.9
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(1) Bronco's share of recoverable volumes include the working interest
recoverable volumes before deductions of royalties payable to others.
Net recoverable volumes will be determined in conjunction with final
economics.

(2) Bronco's share of recoverable volumes include the working interest
recoverable volumes before deductions of royalties payable to others.
Net recoverable volumes will be determined in conjunction with final
economics.

(3) Contingent Resources and Recovery Factors were only assigned to a
portion of the Discovered Resources in the Grand Rapids pool. Recovery
Factors were assigned using Steam Assisted Gravity Drainage technology.


McDaniel's evaluation and the classification of the resources were conducted as per the guidelines of the Canadian Oil and Gas Evaluation Handbook ("COGEH"). Complete definitions of these resource classifications can be found within the COGEH. The resources assigned to the Grand Rapids zone have been classified as contingent at this early stage of development. Industry standard reasons for the classification of these resources include the requirement for additional stratigraphic test wells, the lack of regulatory approval to develop the lease area, the absence of a firm development plan and timing, and the uncertainty of approval of funding to proceed with development.

The Grand Rapids, a cretaceous oil sands deposit of 100 million years in age, occurs at a depth of 225 meters at Wabasca, Alberta. Bronco's approximate gross and net interests in the lands at Wabasca are 19,300 hectares and 16,850 hectares, respectively. The leases for the lands are for 5 to 15 years on the primary term and will be extended if proven capable of production. The distance to the nearest analogous commercial production from the Grand Rapids is approximately 20 miles. The product type will be crude oil bitumen with a quality of 8 degrees API. The estimated cost to drill a stratigraphic test well is $350,000 with future test drilling scheduled to resume in November 2007. The anticipated prices to be received are expected to be in a range of Cdn. $20 to $60 per barrel. Risks and values will only be determined and quantified once the test drilling is completed.

Now that Bronco has received the McDaniel engineering report, Bronco may assess its future plans for the Grand Rapids. Some of the factors and next steps requiring further evaluation by Bronco include:

- Additional stratigraphic test well drilling

- Regulatory approvals, environmental impacts and consultation

- Developing a strategic plan to further define economics and valuation of the Grand Rapids resource

- Well and Facility requirements, and associated capital requirements

- Market solutions for the produced products

Mr. Brian Alford, Bronco's President and CEO, commented, "Bronco has achieved another milestone. Independent engineers McDaniel & Associates Consultants Ltd. have provided estimates of the Grand Rapids resource exceeding previous management estimates. McDaniel has further determined that the Grand Rapids has the potential for a technically viable project with high bitumen recoveries possible. Bronco is now able to prepare plans for the Grand Rapids resource with a higher degree of confidence."

This news release contains forward-looking statements which involve known and unknown risks, delays and uncertainties not under Bronco's control which may cause actual results, performance or achievements of Bronco to be materially different from the results, performance or expectations implied by these forward-looking statements. Forward-looking statements such as the estimates of resources, the references to Bronco's exploration program and drilling program and capital expenditures relating to, and timing of, such programs are based on the opinions and estimates at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond Bronco's control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in estimating resources, including many factors beyond Bronco's control, and no assurance can be given that the indicated level of original bitumen in place or the recovery thereof will be realized. In general, estimates of resources are based upon a number of factors and assumptions made as of the date on which the resource estimates were determined, such as geological and engineering estimates which have inherent uncertainties. The estimates of resources for the lands described in this news release may not reflect the same confidence level as estimates of resources for all of Bronco's lands, due to the effects of aggregation. Bronco undertakes no obligation to update forward-looking information if circumstances or estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact Information

  • Bronco Energy Ltd.
    Brian Alford
    President and Chief Executive Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    or
    Bronco Energy Ltd.
    James V. Esposito
    Executive VP and Chief Operating Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    or
    Bronco Energy Ltd.
    David Johnson
    VP Finance and Chief Financial Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    Website: www.broncoenergy.ca