Avatar Energy Ltd.
TSX VENTURE : AVG

January 06, 2011 17:17 ET

Avatar Energy Ltd. Provides Operational Update and Increases Bank Facilities

CALGARY, ALBERTA--(Marketwire - Jan. 6, 2011) - Avatar Energy Ltd. ("Avatar" or the "Corporation") (TSX VENTURE:AVG) is pleased to provide shareholders with an operational update on its recent drilling activities and successful well test results and information on the increase to its bank facilities.

Avatar, along with its working interest partners, has completed its first horizontal well on its Pembina Cardium farm-in lands (48% working interest). The well was stimulated with an 11 stage oil fracture treatment over a 1,100 metre horizontal section. The well was flow tested for nine days and recovered 100% of the frac fluid. The final flow rate was 700 BOEPD. The well was placed on production January 3, 2011 at 525 barrels of oil per day ("bopd") (252 bopd net) and 1.24 million cubic feet per day ("mmcf/d") of gas (596 mcf/d net) for a total of 732 BOEPD (350 BOEPD net).

Avatar has increased the maximum amount available under its credit facilities with National Bank of Canada to $8 million (CDN). This will provide the Corporation with flexibility for its continued drilling program in the Pembina Cardium area, to acquire further lands in the area and to assist with future acquisitions.

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

BOEs

Reference to BOE means barrels of oil equivalent and is derived by converting gas to oil in the ratio of six thousand cubic feet (mcf) of gas to one barrel (bbl) of oil. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner top and does not represent a value equivalency at the wellhead. References to BOEPD means barrel of oil equivalent per day.

FORWARD LOOKING STATEMENTS

This press release contains forward looking statements. More particularly, this press release contains statements concerning future drilling plans, proposed acquisition strategies, use of available funds and the likelihood of successful future results. Although the Corporation believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because the Corporation can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The risks to which the Corporation is subject include, but are not limited to, operational risks inherent in the exploration, development and production of oil and gas; availability of financing; general economic conditions and changes in the capital markets; volatility of oil and gas prices; competition; and changes in legislation and the regulatory environment. The forward looking statements contained in this press release are made as of the date hereof and the Corporation 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 required by applicable securities laws.

Contact Information

  • Avatar Energy Ltd.
    Mr. Alan D. Jack, P. Eng
    President & Chief Executive Officer
    (403) 517-8818
    (403) 517-8815 (FAX)
    or
    Avatar Energy Ltd.
    Ms. Lorie J. Hynes, CA
    Chief Financial Officer
    (403) 517-8818
    (403) 517-8815 (FAX)