Choice Resources Corp.

Choice Resources Corp.

January 06, 2005 07:30 ET

Choice Announces a Property Sale and Operations Update


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CHOICE RESOURCES CORP.

TSX VENTURE SYMBOL: CZE

JANUARY 6, 2005 - 07:30 ET

Choice Announces a Property Sale and Operations Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 6, 2005) - Mr. Gordon Harris,
President and CEO of Choice Resources Corp. (TSX VENTURE:CZE), announces
the closing of a disposition of two minor properties for gross
consideration of approximately $2.4 million. The first property was in
the Sedgewick area of Alberta with production of approximately 64
equivalent barrels per day with 12 wells (all natural gas). The reserves
on the property, as defined by an independent engineering firm were 541
mmscf in the Proven category and 588 mmscf in the Proven plus Probable
category as booked on March 1, 2004. The effective date of this property
sale was October 1, 2004. The second property was 3 sections of land in
the Alderson area with an average working interest of 100 % and no
associated production or reserves.

The disposition was non-core and proceeds will be used for bank debt
reduction and working capital.

In operations during the past three months, Choice has drilled eight
wells (4.8 net). In addition 6 wells (4.8 net) have had workovers or
re-completions. All wells have been cased and 7 are waiting on tie-ins
which will be done by late January or early February. All these wells
were in the Bow Island and Viking areas. Two farm-ins were arranged
during the period. One was in the Viking-Kinsella area where three wells
were drilled and cased with an average 55% working interest prior to
payout. The other farm-in was for deeper rights in the Bow Island area
where one well was drilled. Six sections of land have been optioned and
seismic is currently being reviewed to determine the follow up locations
to this well.

Production/sales in Choice averaged 1,300 boe/d in December and it is
expected that fiscal year end sales will be between 1,450 and 1,600
boe/d.

During the next three months Choice will be drilling four exploration
wells and testing three exploratory wells which were drilled last year.
In addition four more development wells will be drilled over the next
three months. The final 2005 capital budget is being reviewed by
management and will be released prior to our fiscal year ending February
28.

On a final note, during the quarter Choice put in place a "costless
collar" for 1mm GJ/d of natural gas until April 1, 2005 with an $8.50/GJ
floor price and a $10.40/GJ ceiling price. This hedge marks the
beginning of an ongoing hedging program. (This amount of gas represents
approximately 15% of Choice's sales gas.)

Management is very pleased with the results achieved to date and the
Company now has an inventory of eight exploration opportunities with
significant growth opportunities.

Gordon D. Harris

President and CEO

CAUTION REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained herein constitute forward-looking
statements. The use of any of the words "anticipate", "continue",
"estimate", "expect", "may", "will", "project", "should", "believe", and
similar expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ
materially from those anticipated in such forward-looking statements.
The Corporation believes the expectations reflected in those
forward-looking statements are reasonable but no assurance can be given
that these expectations will prove to be correct and such
forward-looking statements included in this report should not be unduly
relied upon. These statements speak only as of the date of this
presentation. The Corporation does not undertake any obligation to
publicly update or revise any forward-looking statements.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Choice Resources Corp.
    Gordon D. Harris
    President and CEO
    (403) 216-5821
    (403) 216-5828 (FAX)
    info@choiceresources.ca
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of the contents of this news
    release.