Ammonite Energy Ltd.
TSX VENTURE : AMO

July 10, 2009 17:13 ET

Ammonite Energy Ltd. Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - July 10, 2009) -

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Ammonite Energy Ltd. (TSX VENTURE:AMO) ("Ammonite" or the "Company") is pleased to provide a corporate update. Ammonite has been active establishing its position in several light oil prospects in Saskatchewan and Alberta.

In Saskatchewan, the Company now operates over 19 gross sections of land at Kindersley and Elrose. During the second quarter of 2009, Ammonite drilled 2 vertical wells on these lands. These wells have both been completed as producing Viking oilwells that encountered original reservoir pressure. The 2 vertical wells were drilled to help identify the proper alignment and depth for Ammonite's first horizontal well in a multi-well horizontal program to commence this summer. Ammonite believes that most of these lands are prospective for light Viking oil (34 to 39 API) and favorable for horizontal drilling with multi-stage fracing at a well density of up to 4 wells per section. The Saskatchewan Crown royalty for horizontal Viking wells is reduced to only 2.5% on the first 6000 m3 of oil production which greatly improves the economics of the project. In addition to the horizontal potential of these lands, several Bakken gas anomalies have been identified from our recent 2D seismic program that will be drilled once natural gas prices improve.

At Wembley, Alberta, Ammonite recently acquired a 25% working interest from a partner to increase Ammonite's operated interests to 70% in the producing well and lands. The new royalty reduction (maximum 5% Crown royalty) and the drilling incentive program announced by the Alberta Government recently have improved the economics of drilling new wells in Alberta. A development location offsetting Ammonite's light oil discovery well has been licensed to be drilled shortly to take advantage of these incentives. With almost 3 sections of land and extensive seismic coverage, Ammonite believes that this long reserve life light oil property will have a significant impact on the Company.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

This press release may contain forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, anticipations, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. These risks include, but are not limited to: the risks associated with the oil and gas industry (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Ammonite Energy Ltd.
    Mr. Stephen N. Ewaskiw
    President and Chief Executive Officer
    (403) 263-9505
    or
    Ammonite Energy Ltd.
    Mr. John Gee
    VP Engineering and COO
    (403) 263-9505
    or
    Ammonite Energy Ltd.
    Suite 1200, 520-5th Ave S.W.
    Calgary, Alberta, T2P 3R7