Longford Energy Inc.
TSX VENTURE : LFD

Longford Energy Inc.

September 23, 2009 15:32 ET

Longford Energy Announces Initial Resource Assessment for the Chia Surkh Block in the Kurdistan Region of Iraq

TORONTO, ONTARIO--(Marketwire - Sept. 23, 2009) - Longford Energy Inc. (TSX VENTURE:LFD) ("Longford Energy" or "the Company") is pleased to announce that DeGolyer and MacNaughton Canada Limited ("DeGolyer") has completed an independent, initial resource assessment of the Chia Surkh Field, which is a discovered field on the Chia Surkh exploration block held in the Kurdistan Region of Iraq (see press release of July 27, 2009 for announcement of Longford's acquisition of an interest in the Block). DeGolyer has established a gross unrisked prospective resource with a "best estimate" of 132 million barrels of potential ultimate recoverable oil on the field as of September 1, 2009.

In July 2009, Longford announced that it has obtained an interest in the Chia Surkh Production Sharing Contract. The resource estimate is based solely on the shallow Tertiary formations in the Chia Surkh Field, discovered at the beginning of the 20th century and upon which nine wells were drilled between 1902 and 1952. The wells confirmed the presence of oil in the Lower Fars and Jeribe formations. Longford believes that there are also significant indications of oil and gas presence in the deeper Cretaceous formations, but there is currently insufficient information to estimate additional prospective resources. It is important to note the Cretaceous is the primary zone of interest in nearby blocks where significant discoveries have been recently made.

Ahmed Said, President and CEO of Longford, stated, "We are very pleased with this initial independent resource estimate of 132 million barrels of oil. DeGolyer has only estimated the potential of the existing shallow oil discovery in the Chia Surkh Field. In addition to the Chia Surkh field, we have identified up to five exploration prospects and leads that we believe could provide significant opportunities to further discoveries and resource expansion. We look forward to commencing a seismic acquisition program over the next few months."

The chart below sets out the gross undiscovered and prospective resources estimates, as prepared by DeGolyer.



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Gross Undiscoverd and Prospective Resources (Unrisked)(1)(5)(6)(7)
Chia Surkh Field
As of September 1, 2009
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Oil (millions of Barrels)
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Low Best High
Category Estimate Estimate Estimate
P90(2) P50(3) P10(4)
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Petroleum Initially in Place 59 662 6556

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Prospective Gross 6 132 1,967
Ultimate Recovery
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Notes:

1. These are the gross volumes estimated for the Chia Surkh Field, without
any adjustments for working interest or encumbrances. The company holds
a 40% interest in this resource accumulation.
2. Low Estimate is considered to be a conservative estimate of the quantity
that will actually be recovered. P90 means that there is a 90-percent
chance that an estimated quantity, such as a prospective resources
volume or associated value, will be equalled or exceeded.
3. Best Estimate is considered to be the best estimate of the quantity that
actually will be recovered. P50 means that there is a 50-percent chance
or that it is equally likely that the actual remaining quantities
recovered or associated value will be greater or less than the best
estimate.
4. High Estimate is considered to be an optimistic estimate of the quantity
that will be recovered. P10 means that there is a 10-percent chance that
an estimated quantity, such as a prospective resource volume or
associated value, will be equalled or exceeded.
5. While the above quantities have not been adjusted for risk, DeGolyer has
estimated that a Geological Risk of 63% may apply to this type of
resource accumulation.
6. The gross prospective reserve is based on the Chia Surkh Field. No
reserves have been assigned to the five additional leads that are on the
Chia Surkh Block.
7. The resource estimate was prepared in accordance NI 51-101 and the COGE
Handbook.


Prospective resources are those resources 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. The chance of commerciality is the product of these two risk components. There is no certainly that any portion of the prospective resources will be discovered. 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 or that it will be commercially viable to produce any portion of the prospective resources.

Prospective oil resources are undiscovered resources that indicate exploration opportunities and development potential in the event a commercial discovery is made and should not be construed as reserves or contingent resources. The forgoing estimates have not been risked for chance of discovery or chance of development.

The Chia Surkh Block

The Block comprises three blocks, which were previously designated by the Kurdistan Regional Government as K46, K47 and K48. The Block is 938 square kilometers in size and is located southeast of the city of Sulaymania between the Diyala (Sirwan) River and the Iranian border. Apart from some mountainous areas that delineate the Iranian border, the area is generally of low relief with accessibility for oil related operations. The area is mostly within the Foothill Tectonic Zone and the boundary with the High Fold Zone trends NNW along the Block's eastern boundary. The Foothill Zone, which is 160 km wide and characterized by long narrow anticlinal structures, contains most of the major oil fields of northern Iraq.

The Block offers both a field development opportunity and multiple exploration prospects. The existing discovery, the Chia Surkh field, trends NW-SE and is understood to cover a surface area of approximately 42 square kilometers with exposed Miocene Injana Formation (Upper Fars) surrounded by Pliocene Bakhtiari Formation (Bai Hassan and Mukdadiya). A well, which was drilled by the predecessor of Anglo-Persian Oil Company in 1902, discovered oil at a depth of approximately 700 meters in a fractured limestone unit of the Lower Fars Formation. After World War II, a deeper well recovered 41 degrees API oil from the Jeribe formation with indications that the hydrocarbon column may exceed 220 meters. The Company believes that the Chia Surkh reservoir is correlative to the fractured reservoirs in the Kor Mor field that is approximately 70 kilometers to the north-west, as well as the Asmari reservoir present in many Iranian fields. It is also believed that deeper unevaluated horizons could be prospective for oil and gas.

South of the Chia Surkh structure, the Company believes that the Chia Surkh South Anticline extends for 15 kilometers across the Block. This feature is understood to be the southeast extension of the Kirkuk-Kor Mor structure. A surface fault is identified by outcrops of Injana Formation against the younger Upper Bakhtiari Bai Hassan Formation and may indicate a deeper prospective structure. Additional anticlinal structures extend along the Iranian border and across the northern portion of the block. The Company believes that all of these features add to the exploration upside for this block.

Longford has funded the initial signature and capacity building bonuses payable to the KRG under the PSC and intends to fund the initial work commitments under the PSC through the use of the proceeds from the private placement financing that it completed in July 2009 (as announced on July 10, 2009). The remaining minimum work program obligations represents an exploration commitment, which includes the acquisition, processing and interpretation of a minimum of 250 kilometres of 2D seismic data and drilling of two wells during the first exploration period. The Company expects to spend in excess of US$100 million dollars over the next three years on the Block. Further, the Company plans to disclose further details regarding its exploration program as plans are finalized.

About Longford Energy Inc.

Longford Energy Inc., is a junior Canadian oil and gas exploration and production company. Longford has acquired a significant interest in the Chia Surkh Block Production Sharing Contract in the Kurdistan Region - Iraq. The Block offers both a field development opportunity and multiple exploration prospects.

Forward-Looking Information Warning

Except for statements of historical fact relating to the Company, information contained herein constitutes "forward-looking information" under Canadian securities legislation. Forward-looking information includes, but is not limited to, statements with respect to the prospective nature of the Block; estimates regarding resources; future oil and gas prices; future development activities and assessments; ability to identify other fields; ability to recover and produce oil; government relations; and the ability to attract financing on acceptable terms. Generally, forward-looking information can be identified by the use of forward looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Information underlying resource estimates includes the assumptions and parameters set out above and the analysis of historical wells and exploration work conducted on the field. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Longford to be materially different from those expressed or implied by such forward-looking information. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. Longford does not undertake to update any forward looking information, except in accordance with applicable securities laws.

To view the KURDISTAN PETROLEUM BLOCKS, please visit the following link: http://media3.marketwire.com/docs/kurdistan923map.pdf

To view the CHIA SURKH BLOCK AND SURROUNDING FIELDS, please visit the following link: http://media3.marketwire.com/docs/chiasurkh923map.pdf

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