Sierra Vista Energy Ltd.

Sierra Vista Energy Ltd.

May 31, 2006 10:51 ET

Sierra Vista Adds 16 1/2 Sections of Land to Ante Creek, Alberta Core Area

CALGARY, ALBERTA--(CCNMatthews - May 31, 2006) - Sierra Vista Energy Ltd. (TSX VENTURE:SVR.A) (TSX VENTURE:SVR.B) ("Sierra Vista" or the "Company") has entered into a farm-in agreement, with ARC Resources Ltd. ("Farmor"), on 16 1/2 sections of undeveloped land in Sierra Vista's core area at Ante Creek. The Company has committed to drill 9 earning wells prior to December 31, 2007, with an option to drill an additional 3 wells. Upon completion of this 12 well program, of which certain wells may be classified as exploratory, the Company will have earned an interest in all 16 1/2 sections of land. This would increase the Company's current Ante Creek land base from 26 3/4 sections to 43 1/4 sections. The subject agreement provides Sierra Vista access, subject to any third party obligations, to process certain volumes of hydrocarbon through the Farmor operated processing facility.

The Company has also closed on the previously announced acquisition of an undivided 100% working interest in 2 sections of land and a producing well offsetting its existing production at Ante Creek.

In order to better enable the Company to meet its farm-in obligations it has entered into a 3 month contract for a second drilling rig which will be delivered to the Ante Creek area, and commence drilling, on or about June 1, 2006.

Sierra Vista is an Alberta-based company formed to participate in oil and gas exploration, development and acquisitions focusing in the Peace River Arch and South Central region of Alberta. The Corporation's shares trade on the TSX Venture exchange under the symbols SVR.A and SVR.B.

Forward Looking Statements: This document contains statements about future events that are forward looking in nature and as a result are subject to certain risks and uncertainties such as changes in plans or the occurrence of unexpected events. Actual results may differ from the estimates provided by management.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.

Contact Information

  • Sierra Vista Energy Ltd.
    Mr. Mark Malouin
    President & Chief Executive Officer
    (403) 265-9393 ext 201
    (403) 265-9224 (FAX)
    Suite 850, 101-6th Avenue SW
    Calgary, Alberta T2P 3P4