Zapata Energy Corporation

Zapata Energy Corporation

March 04, 2010 09:00 ET

Zapata Energy Corporation: Oil Growth Opportunities

CALGARY, ALBERTA--(Marketwire - March 4, 2010) - Zapata Energy Corporation (TSX VENTURE:ZCO)

This news release contains forward-looking information within the meaning of applicable securities laws as well as references to "barrels of oil equivalent", or "BOE", and similar terms. This news release also includes references to volumes of oil that are not categorized as reserves under National Instrument 51-101, See "Forward-Looking Information", "Barrels of Oil Equivalent" and "Disclosure of Resources other than Reserves" at the conclusion of this news release.:

Zapata's oil focus provides excellent reserves growth and financial strength:

- As per Sproule Associates Limited's ("Sproule") evaluation of Zapata's reserves as at December 31, 2009 (see Zapata press release March 1, 2010).

-- Proved oil reserves increased 1.3 mmbbl (53%) in 2009.

-- The net present value (NPV) of proved plus probable reserves at December 31, 2009, before income taxes and discounted at 10%, was $217 million.

-- Proved plus probable oil reserves contributed 78% ($176 million) of total NPV

-- Proved oil reserves (3.8 mmbbl) contribute 58.4% ($126.8 million) of the total NPV

- In addition, Zapata believes that it has significant near term upside not included in the reserve report value.

-- Management expects significant additional value to be assigned to its Silver area oil reserves as the waterflood continues to provide positive additions to production. Based on management's estimate of 27 million barrels (12% recognized as recoverable to date) of original oil in place, Zapata expects that each 10% increase in recovery would add 2.7 million barrels to Zapata's reserves and should be recognized in future reports.

-- Zapata owns Cardium oil rights in East Pembina which have become much more valuable with advances in horizontal technology. Zapata owns 10.5 net sections of rights in the Cardium where recent land sales have averaged $7,000 per hectare. Within the greater Cardium fairway Zapata has a total of 58 (47 net) sections of Cardium oil rights.

-- Zapata has large land holdings and infrastructure in the prolific oil region of East Central Alberta that provide strategic advantage for adding oil reserves.

- Zapata is achieving strong cash flow due to its focus on high netback oil production.

- Fourth quarter production averaged 2,852 boe/d (53% oil)

- Zapata's oil based cash flow, recent equity funding, and strong balance sheet provide many opportunities for growth such as:

-- An aggressive exploration and development program

--- $1.5 million Seismic program now underway to confirm additional oil locations

--- First 10 well oil drilling program for 2010 should commence this week to continue the Corporations successful fall oil drilling program.

-- Acquisitions/mergers to increase oil opportunities

-- Further Debt Reductions to provide greater flexibility

Considering the potential inherent in Zapata's oil production, oil reserves, significant land base in its core oil area for development and its immediate potential for oil reserve additions, Zapata is developing various strategies to pursue its future potential. Emerging Equities Inc. is providing advice and assistance in this regard.

Zapata is a junior oil and gas production company operating in western Canada and trades on the TSX Venture Exchange under the symbol "ZCO."

Forward-Looking Information

This news release contains certain forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "budget", "strategy" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: the volume and value of the company's oil, natural gas and natural gas liquids reserves and resources and potential future additions to its reserves; drilling and exploration and development plans; seismic activities; and the company's potential future strategies.

The forward-looking information contained in this news release reflect several material factors and expectations and assumptions of the company including, without limitation: that the company will continue to conduct its operations in a manner consistent with past operations; the general continuance of current or, where applicable, assumed industry conditions; the continuance of existing (and in certain circumstances, the implementation of proposed) tax, royalty and regulatory regimes; the accuracy of the estimates of the company's reserve and resource volumes; certain commodity price and other cost assumptions; and the continued availability of adequate debt and/or equity financing and cash flow to fund its capital and operating requirements as needed. The company believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.

The forward-looking information included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: changes in commodity prices; changes in the demand for or supply of the company's products; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans by the company or by third party operators of the company's properties; increased debt levels or debt service requirements; inaccurate estimation of the company's oil and gas reserve and resource volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; reliance on industry partners; and certain other risks detailed from time to time in the company's public disclosure documents (including, without limitation, those risks identified in the company's Annual Information Form).

The forward-looking information contained in this news release speak only as of the date of this news release, and the company assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.

Barrels of Oil Equivalent

This news release also contains references to "boe" (barrels of oil equivalent and "mboe" (thousand barrels of oil equivalent). Zapata has adopted the standard of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl) when converting natural gas to boes and mboes. Boes and Mboes may be misleading, particularly if used in isolation. The foregoing conversion ratios are based on an energy equivalency conversion method primarily applicable at the burner tip and do not represent a value equivalency at the wellhead.

Disclosure of Resources other than Reserves

This news release contains estimate of "oil in place" ,which means the quantity of oil that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated accumulations yet to be discovered. Oil in place is not, and should not be confused with, reserves under National Instrument 51-101, and there is no assurance that the volumes represented will be discovered, and if discovered, there is no certainty that it will be commercially viable to produce any portion of these resources. The term "reserves" means those quantities of oil and gas anticipated to be economically recoverable from discovered resources as defined in the Canadian Oil and Gas Evaluation Handbook (the "COGE Handbook"). In this presentation the term recoverable reserves is used as it is in common usage. This term has the same meaning as reserves defined in accordance with the COGE Handbook.

"Original resources" are those quantities of oil and gas estimated to exist originally in naturally occurring accumulations. Also defined as per the COGE Handbook. In this presentation we have provided estimates of the oil portion of original resources which is referred to by us as "Original Oil in Place".

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

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