Accrete Energy Inc.
TSX : GZ

Accrete Energy Inc.

October 31, 2005 11:51 ET

Accrete Energy Inc. Provides Operational and Reserves Update

CALGARY, ALBERTA--(CCNMatthews - Oct. 31, 2005) - ACCRETE ENERGY INC. ("Accrete") is pleased to provide the following operational update.

During fiscal 2005, Accrete has drilled a total of 20 wells (15.3 net) resulting in 3 gas wells (2.4 net), 16 oil wells (11.9 net) and 1 dry holes (1 net) for an overall success rate of 95% gross (93% net).

For the past few months Accrete has focused on infrastructure improvements that will enhance and allow the Company to maintain reliable production volumes from these drilling successes.

Harmattan: The May, 2005 installation of Accrete's gas compressor at 7-6-32-5-W5M has allowed Accrete to continue with its aggressive drilling program. The area is presently producing approximately 2000 barrels of oil equivalent per day ("BOEPD") net, comprised of 5.20 million cubic feet per day ("MMCFD") of net sales gas, 535 BOE'S net associated liquids, as well as 600 BPD of net oil. These volumes are expected to increase as the Company completes a 3 well (2.7 net) tie in. Recent drilling has produced positive results including the identification of another prospective trend. Early production numbers from this trend have encouraged Accrete to expand its drilling program to exploit this opportunity. The Company has identified 31 additional locations on its current land base. The additional production will be handled within the present Harmattan infrastructure.

Claresholm: Accrete has reinforced its commitment to this area by installing its own gas plant, (compression and liquid recovery facilities) during the summer months. This facility, together with an Accrete owned tie-in to the sales line, ensures uninterrupted production and has resulted in all of Accrete's wells in the area being tied-in and producing, with net volumes being 4.5 MMCFD (6.4 MMCFD gross) plus 50 BPD net associated liquids (total 800 BOEPD net). The success of Accrete's drilling program in this area has led to the evaluation of further drilling with 10 locations currently identified. At this time, one additional well has been licensed and drilling operations are expected to commence in early November.

Boltan: Severe curtailment of its production in the area due to 3rd party facility constraints has led Accrete and partners to complete the installation of its own gas compressor which is expected to be commissioned by November first. November production rates from its two working interest gas wells are forecast to be 2.0 - 3.0 MMCFD (1.1 - 1.5 MMCFD net) (183 - 250 BOEPD net). In addition, Accrete is participating in an extensive 3D seismic program which should define its drilling program in this area for the winter drilling season.

Total production for the Company once the Boltan compressor is commissioned is expected to exceed 3000 BOEPD.

RESERVES UPDATE

A recent reserve update, at the end of the third quarter, shows that Accrete's reserve base (proven and probable) has increased from 5.185 MMBOE's to 6.2 MMBOE's during the quarter. This increase is a result of additional drilling and revisions (production) to those reserves as previously reported by the Company's consulting engineers, Gilbert Lausten Jung as at June 1, 2005. Accrete presently has 4.56 MMBOE's proven (up from 3.67 MMBOE's) with previous proven undeveloped reserves now being included as proved producing. The recent drilling has added a Company estimated 2.02 MMBOE's of new proven undeveloped reserves which have not yet been verified by our outside engineers but are believed to fall within assignment criteria. This is expected to increase by year end as further drilling takes place.

Accrete is a junior oil and gas company focused on the exploitation and development of oil and natural gas in western Canada. Accrete trades on the TSX Exchange under the symbol "GZ".

Disclaimer

This news release contains forward-looking information on management expectations regarding future plans and intentions including future production, future drilling, project start-ups and future capital spending. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue" and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Actual results or estimated results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors or revisions. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements. Such factors include changes in general economic and market conditions and those described in the Corporation's public filings on SEDAR. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances.

Contact Information

  • Accrete Energy Inc.
    Peter Salamon
    President and CEO
    (403) 269-8846
    (403) 269-8366 (FAX)