Nexstar Energy Ltd.

Nexstar Energy Ltd.

November 27, 2007 09:30 ET

Nexstar Energy Acquires Lands on High Impact Prospects and Provides Drilling Update

CALGARY, ALBERTA--(Marketwire - Nov. 27, 2007) -


Nexstar Energy Ltd. ("Nexstar Energy" or the "Company") (TSX VENTURE:NXE.A) (TSX VENTURE:NXE.B) is pleased to announce the recent acquisition of 4,480 acres (1,492 net) of undeveloped land on a high-impact oil and gas prospect in the Swan Hills-Whitecourt area of northwestern Alberta. The South Whitecourt prospect was initially identified as a result of an airborne survey conducted in 2006 for the Company by Energy Exploration Technologies Inc. ("NXT"), utilizing NXT's proprietary stress-field detection ("SFD") technology. The prospect is supported with 3-D seismic and the first well will target the oil and gas potential of the Swan Hills and Gilwood formations at a depth of approximately 2,800 metres. Preliminary site assessment has commenced for the drilling of this high-impact prospect in the first quarter of 2008, subject to surface access and regulatory approval.

The Company also announces that it plans to commence the drilling of a high-impact prospect at Goodwin in the Swan Hills-Whitecourt area within the next thirty days, subject to surface access. This prospect was also initially indicated utilizing SFD technology and has been geophysically confirmed with 3-D seismic data. The Company will be operating the well and participating for a 50% working interest on a farm-in basis. The well has been licensed and will be directionally drilled to a bottom-hole location at 16-16-58-12W5M to evaluate the oil and gas potential of the Nordegg and Pekisko formations at a planned depth of 2,100 metres.

Drilling and Operations Update

To date, the Company's summer and fall drilling programs have resulted in the drilling of eleven (5.85 net) exploratory wells and two (0.4 net) development wells. Of those drilled, two are producing, five are cased for completion and six (3.35 net) were abandoned. The completion of the first of two Pembina area wells drilled for Viking natural gas potential in the summer of 2007 had been delayed due to difficult surface access conditions. The non-operated 5- 30 -47-3W5M well (0.4 net) has now been completed and tested natural gas at economic rates. This well has been shut-in for pressure build-up and subject to the analysis of this data, it is expected that the well will be tied-in to pipeline infrastructure this winter. The completion of the second Pembina well at 02/4-19-47-3W5M (0.6 net) will be delayed until sufficient pressure data is obtained from the recently completed 5-30 well. An exploratory well drilled at 8-19-47-3W5M also in the Pembina area, encountered structure, reservoir and natural gas flows but was abandoned due to the limited areal extent indicated from drill-stem test pressure data. At Calmar in central Alberta, a non-operated well was drilled to test a 3-D seismically defined feature but was abandoned due to lack of reservoir and structural build-up. At Rycroft in northwestern Alberta, the 1-18-78-4W6M well (0.5 net) was completed and fraced in the summer of 2007 resulting in natural gas flows but significant water production. The operator has proposed remedial down-hole work to attempt to eliminate water inflow from this well.

Under the previously announced 55 section farmin and option in the North Pembina area, three wells (1.5 net) have been drilled, resulting in two (1.0 net) cased wells and one (0.5 net) abandonment. The drilling of one additional well, the completion of the two cased wells and the re-completion of two existing wells acquired from the farmor are anticipated to occur by year end under this multi-well farmin and option agreement. With four cased wells yet to be completed, the Company is currently producing approximately 100 boepd with a further 60 boepd of additions from recent completions expected within the next 90 days.

Short Term Investments

Recent announcements concerning asset backed commercial paper ("ABCP") have suggested that owners of the affected ABCP may receive ownership in longer term notes matching the amortization and maturity of the transactions held within each trust. It is expected that further clarity of the matter will be provided on or before December 14, 2007. The Company is an owner of $5.0 million in face value of Apsley Trust ABCP. Apsley Trust has recently received a downgrade by Dominion Bond Rating Service as a result of the Trust's exposure to US non-prime residential mortgage-backed securities. Given the foregoing, Nexstar Energy anticipates its $5.0 million ABCP investment will be reclassified as non-current and discounted on its third quarter 2007 financial statements. The Company will continue to monitor events relating to ABCP and will update shareholders as information becomes available.


The Company looks forward to production and reserve additions from its recently completed wells and the continuation of drilling and completion activity in the North Pembina region. Depending on the success of the initial farmin wells, Nexstar Energy expects that North Pembina may become a focus area in 2008. The Company also looks forward to the commencement of drilling operations on its high-impact prospects in the Swan Hills-Whitecourt region of northwestern Alberta this winter.

Nexstar Energy is an emerging junior oil and gas company that is focused on drilling multi-zone crude oil and natural gas prospects in west central Alberta, complemented by strategic acquisitions.

For further information, please review Nexstar Energy's website.

This news release may contain 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 the Company'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. The Company'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 the Company 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 the Company 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 the Company 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's 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.

9,200,000 Class A Shares

1,080,000 Class B Shares

ADVISORY: The TSX Venture Exchange has neither approved nor disapproved the contents of this news release. The TSXV does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Nexstar Energy Ltd.
    Peter A. Carwardine
    President and CEO
    (403) 263-6133 ext. 201
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    Brian J. Spilchen
    VP Finance and CFO
    (403) 263-6133 ext. 202
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    603 - 7 Avenue SW, Suite 525
    Calgary, Alberta T2P 2T5