Nexstar Energy Ltd.

Nexstar Energy Ltd.

September 22, 2009 08:30 ET

Nexstar Energy Provides Operations Update and Announces Expanded Credit Facilities

CALGARY, ALBERTA--(Marketwire - Sept. 22, 2009) - Nexstar Energy Ltd. ("Nexstar Energy" or the "Company") (TSX VENTURE:NXE.A) (TSX VENTURE:NXE.B) announces that production testing of its third Cardium horizontal well in the Pembina area of central Alberta has now been finalized. Initial test data received from the 100/16-13-047-03W5M well indicates that well performance is anticipated to be similar to the Company's other producing horizontal Cardium oil wells in the immediate area. The new 16-13 well is presently shut-in for pressure build-up and will be equipped for oil production within two weeks. Nexstar Energy participated for a 31.82% working interest in the costs of this well to earn an equivalent working interest before payout and a 20.68% working interest after payout.

The Company also reports that its discovery well located at 100/1-25-047-03W5M, produced to date a total of approximately 32,480 barrels of light oil, 13.8 mmcf of solution gas and no water, after 217 days of production. The follow-up well located at 100/16-19-047-02W5M, produced to date approximately 10,360 barrels of oil, 2.3 mmcf of solution gas and no water, after 45 days of production.

The Company currently holds 8,320 gross acres (2,633 net acres) of undeveloped Cardium lands in the Pembina area and an inventory in excess of 40 Cardium light oil drilling locations with working interests varying between 20% and 60%. Drilling operations for the fourth Cardium horizontal well commenced on September 19, 2009 with the fifth well in the Company's program expected to spud by mid-October.

Bank Facilities Expanded

Nexstar Energy also announces that it has entered into expanded credit facilities (the "Credit Facilities") with a Canadian Chartered Bank. The expanded Credit Facilities provide for a revolving operating demand loan of up to $3.0 million and an acquisition/development demand loan of up to $1.0 million. The proceeds from the expanded Credit Facilities will be used to fund the ongoing development of the Company's oil properties and for general corporate purposes.

The Company also advises that a further 1,615,000 Class A Shares have recently been issued as a result of the exercise of warrants issued pursuant to a Private Placement that closed on November 21, 2008.

About Nexstar Energy

Nexstar Energy is an emerging junior oil and gas company focused on the drilling and development of its Cardium light oil prospects in the Pembina area of west central Alberta.

Reader Advisory

This news release may contain certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; and (v) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements 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 natural 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 and the United States, 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, what benefits, including the amount of proceeds, 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.

Boes 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.

92,368,169 Class A Shares

1,080,000 Class B Shares

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts 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