Canoro Resources Ltd.
TSX VENTURE : CNS

Canoro Resources Ltd.

January 21, 2008 07:58 ET

Canoro's Proved Reserves Increase Substantially, Updates India Operations

CALGARY, ALBERTA--(Marketwire - Jan. 21, 2008) - Today, Canoro Resources Ltd. (TSX VENTURE:CNS) announces the results from its interim reserves estimate update for the Amguri reserve. This reserve estimate was prepared by Sproule International Limited, the Company's reserve evaluator for the Amguri field, including the successful results from Amguri 10B and Amguri 11 and the new price environment since March 31, 2007. The reserves for the AA-ON/7 block have not been updated at this time, as no work had been done on the Dergaon discovery since the last reserves update at March 31, 2007. The reserves for each block and Canoro's total for India are illustrated in the tables below:



------------------------------------
March 31, 2007 Dec. 31, 2007
Amguri (mboe) (M$US)(i) (mboe) (M$US)(i)
------------------------------------
Proved Developed Producing 207 4,277 173 6,226
Proved Developed Non-producing - - 1,057 30,717
Proved Undeveloped 250 94 1,589 39,582
----------------------------------------------------------------------
Proved 457 4,371 2,819 73,525
Probable 248 3,929 2,911 67,174
----------------------------------------------------------------------
Proved + Probable 705 8,300 5,730 140,699
Possible 565 8,263 3,512 97,380
----------------------------------------------------------------------
Proved + Probable + Possible 1,270 16,563 9,242 238,079
------------------------------------
(i)The Net Present Value of the reserves calculated with a 10%
discount rate before any taxes using forecast prices



-----------------------------------
March 31, 2007 Dec. 31, 2007
AA-ON/7 (mboe) (M$US)(i) (mboe) (M$US)(i)
-----------------------------------
Proved - - N/A N/A
Probable 3,596 26,667 N/A N/A
----------------------------------------------------------------------
Proved + Probable 3,596 26,667 N/A N/A
Possible 2,622 21,017 N/A N/A
----------------------------------------------------------------------
Proved + Probable + Possible 6,218 47,684 N/A N/A
-----------------------------------
(i) The reserves for AA-ON/7 were not updated at this time as no work
had been done on the Dergaon discovery since the last reserves update
at March 31, 2007. The Net Present Value of the reserves calculated
with a 10% discount rate before any taxes using forecast prices


---------------------------------------
March 31, 2007 Dec. 31, 2007(ii)
India (mboe) (M$US)(i) (mboe) (M$US)(i)
---------------------------------------
Proved Developed Producing 207 4,277 173 6,226
Proved Developed Non-producing - - 1,057 30,717
Proved Undeveloped 250 94 1,589 39,582
----------------------------------------------------------------------
Proved 457 4,371 2,819 73,525
Probable 3,844 30,596 6,507 93,841
----------------------------------------------------------------------
Proved + Probable 4,301 34,967 9,326 167,366
Possible 3,187 29,280 6,134 118,397
----------------------------------------------------------------------
Proved + Probable + Possible 7,488 64,247 15,460 285,763
---------------------------------------
(i) The Net Present Value of the reserves calculated with a 10%
discount rate before any taxes using forecast prices.

(ii) The December 31, 2007 numbers are an arithmetic addition of the
Amguri December 31, 2007 reserve estimates and the AA-ON/7 March 31,
2007 reserve estimates.


Amguri Update

Canoro Resources Ltd. has completed extended production testing on the Amguri 11 Main Barail sand, to aid in determining the optimum production levels for the Barail reservoir, while maximizing total hydrocarbon recovery. The wells (Amguri 10B and 11) are expected to be tied in and on production shortly.

To increase production further throughout 2008, Canoro has planned the drilling of 10 wells at Amguri. Eight wells are targeted in the main Barail sand, with two wells targeting the Tipam. Canoro's Amguri budget for fiscal year 2008 is US$39 million, subject to Government of India approval.

Two western drilling rigs have been contracted and are being mobilized to Amguri right now. The first, a shallow capacity drilling/service rig capable of drilling to approximately 3,000 m, is expected to begin drilling operations in February. The first operation is an appraisal well in the northeast portion of the Amguri field in the vicinity of Amguri 1.

The second western rig is a deep capacity drilling rig capable of drilling to approximately 5,000 m. This rig is expected to begin drilling operations in April on the Amguri 12 main Barail sand well, a significant step-out location from the highly successful Amguri 11 well. Amguri 12 is planned to be drilled to basement to also evaluate the Basal Sandstone formation as a secondary target.

The results of these two wells will help determine the remaining development and appraisal locations at Amguri.

Canoro is continuing to pursue the issue of re-pricing all future gas sales with the off taker. It is Canoro's belief that there is ample justification for an increase in the price of Amguri's gas however, at this time no firm decision on this issue has been taken. In addition, Canoro further plans to monetize the LPGs (propane and butane) from the Amguri gas stream. An analysis of the gas reveals approximately 30 to 50 barrels of condensate and LPGs per million cubic feet could be recovered with the installation of proper extraction facilities.

AA-ON/7 Update

The Borkathani Cretaceous prospect well site is under construction, with all land issues now resolved. This approximately 1,500 m deep prospect will be ready for drilling by the shallow rig shortly. The Borkathani well is testing a large Cretaceous prospect that is believed to be connected to the previous Dergaon gas discovery.

A 40 km 2D seismic program has commenced in the subthrust area of the block to provide additional information (confirmation line) around a large sub-thrust and anticline prospect earlier identified. The deep rig will be capable of drilling up to two wells on the eastern portion of the block, starting as early as the fourth quarter of 2008, to evaluate the Bandersulia Anticline and any sub-thrust potential underlying the anticline.

Canoro's AA-ON/7 budget for fiscal year 2008 is US$4 million, subject to Government of India review.

AA-ONN-2003/2 Update

The operator has commenced a 100 km2 3D seismic acquisition program on the block to provide additional data prior to drilling of the exploration wells.

Canoro anticipates drilling to begin later this year.

Business Development Update

The Government of India has announced the latest exploration licensing round, NELP VII, with bids due in April. We are reviewing the available blocks to evaluate the opportunities available.

Including Nagaland, Canoro continues to pursue additional opportunities for expanding our operating presence in Northeast India.

Canoro is a Canadian-based international oil and gas company operating in the Assam/Arakan basin of northeast India. Canoro is the operator of Amguri field with a 60% working interest. Canoro is the operator with a 65% working interest in the AA-ON/7 exploration block. Canoro also has a 15% non-operated working interest in the AA-ONN 2003/2 exploration block.

Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.

This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Canoro's control. Such risks and uncertainties include, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Canoro's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that Canoro will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Canoro or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Canoro does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Boe may be misleading, particularly if used in isolation. A boe conversion ratio 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.

The estimated values do not represent fair market value. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.

Contact Information

  • Canoro Resources Ltd.
    Rob McInnis
    Vice President, Business Development and Corporate Affairs
    (403) 543-5748
    (403) 543-5740 (FAX)
    or
    Canoro Resources Ltd.
    2810, 715 - 5th Ave SW
    Calgary, Alberta T2P 2X6
    Email: MAIL@CANORO.COM
    Website: www.canoro.com