Verona Development Corp.
TSX VENTURE : VDC

Verona Development Corp.

January 09, 2008 18:35 ET

Verona Announces Farm-Out of Coal Bed Methane Property to Shell

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 9, 2008) - Verona Development Corp. (TSX VENTURE:VDC) ("Verona" or "the Company") is pleased to announce it has entered into an agreement with Shell China Exploration and Production Company Limited, a subsidiary of Royal Dutch Shell ("Shell"), pursuant to which Shell will acquire from Verona a 55 percent interest in the 2005 Production Sharing Contract (the "PSC") between Verona and China United Coalbed Methane Corp. ("CUCBM") for the exploitation of coalbed methane ("CBM") resources in Shiloubei, Shanxi Province, China.

The principal terms of the agreement with Shell are summarized as follows:

- Shell will take over from Verona as operator in respect of CBM operations on the Shiloubei property.

- Shell will be responsible for 100 percent of future exploration costs in respect of the Shiloubei project.

- Shell will pay US$1,370,000.00 to Verona to reimburse Verona for its past costs incurred to meet exploration requirements under the PSC.

- The resulting interests of Shell and Verona in the PSC will be 55% and 5% respectively.

- Development costs relating to the Shiloubei property will be paid in proportion to the respective interests of Verona and Shell.

"We are pleased to have established a relationship with Royal Dutch Shell which provides for the ongoing exploration of the Shiloubei project without further cost to Verona," stated Verona's President, Mr. Juraj Adamec. "Verona will now focus its efforts on its other projects with a view to maximizing revenues and growing the Company."

ABOUT THE SHILOUBEI PROPERTY

Following the completion of regional exploration studies over the 1,015 square kilometre CBM concession, Verona drilled two wells (SLB-VO1C and SLB-VO2C) targeting major coal seams of the Late Carboniferous Taiyuan and the Early Permian Shanxi Formations. Each well was designed to drill and core the sequence between seams #2 and #10 previously identified. In addition, coal samples were taken for onsite gas desorption and the thicker coals (#8 and #10) were subjected to well testing. These wells were drilled concurrently under the supervision of Verona's exploration staff by the by Shanxi Coal Geology Prospecting Institute Drill Crews 148 and 114. SLB-VO1C-2 was drilled to a depth of 805 metres and SLB-VO2C a depth of 910 metres, and both wells were wireline logged.

Coal seam thickness ranged from 0.2 metres to 3.15 metres in six seams for a total coal thickness 8.39 metres in SLB-VO1C-2 and 0.1 metres to 2.2 metres in nine seams for a total coal thickness of 5.77 metres in SLB-VO2C. Coal analyses indicate that the coals are high volatile bituminous to anthracite. Physically the coals were very difficult to sample because of their powdery nature. Because of the disintegration of soft coal during coring only a small number of samples could be retrieved as follows: SLB-VO2C seam #8 with an average gas content of 11.8cm3/gm; SLB-VO1C seam #4 with average 12.08cm3/gm; seam #8 with average 12.46cm3/gm and seam #9+10 with an average of 5.82cm3/gm. In both wells the permeability was extremely low and especially so in seam #10 (average 0.21mD). Further preliminary testing revealed the CBM potential in Shiloubei to be extremely limited. The nature of the coals, the terrain and lack of infrastructure indicate a longer timeline for the development of CBM than the Company is prepared to undertake.

The two Verona wells encountered significant thickness of sandstones in the Shanxi Formation. In SLB-VO2C there are five major bodies with a net thickness of 45m of medium-coarse sandstone and in SLB-VO1C a net thickness of 28m. Similar sandstones are important hydrocarbon reservoirs in the Ordos basin which lies 200 km on the western side of the Yellow River. In this area both oil and gas are produced from Permian and Carboniferous sandstones and Ordovician limestones which occur at depth in Shiloubei. The conventional gas potential is largely untested and the main potential lies at depths greater than 1,500 metres and would likely require significant seismic work before drilling targets.

ABOUT VERONA

Verona is an energy and petroleum company focused on the exploration and exploitation of conventional and unconventional petroleum systems in global markets.

On Behalf of the Board of Directors

VERONA DEVOPMENT CORP.

Rod Husband

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

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

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