Blackdog Resources Ltd.

Blackdog Resources Ltd.

July 08, 2008 12:42 ET

Blackdog Announces Light Oil Drilling Strategy and Non-Brokered Private Placement

CALGARY, ALBERTA--(Marketwire - July 8, 2008) -


Blackdog Resources Ltd. ("Blackdog" or the "Company") (TSX VENTURE:DOG) is pleased to provide an update on the Company's light oil drilling strategy for Q3 of 2008. Blackdog is also pleased to announce the terms of a non brokered private placement, the proceeds of which will be used to fund this upcoming exploration and development drilling.

Blackdog intends to participate in the first of up to three (1.8 net) horizontals development wells on its pooled Whitebear, Saskatchewan property with a private company ("Privco") during the first week of August, 2008. Blackdog has elected to retain its entire 60% working interest in the proposed locations. Each well is anticipated to cost approximately $1,000,000 (net $600,000 to Blackdog). Privco has drilled two wells on adjacent lands, one in Q4 of 2007 and one in Q1 of 2008, both of which had initial production rates of over 150 barrels of light oil per day (bopd) and have leveled off in the 80 bopd range after several months of production. The Company believes that modest drilling success on its Whitebear property may have a material effect on the Company's cash flow, production and reserves.

Blackdog is also pleased to announce that it plans to drill a Granite Wash exploration well on its 100% owned EVI property near Red Earth, Alberta in late August or early September, 2008. Successful Granite Wash wells in the area have shown initial production rates ranging from 350 bopd up to as high at 1000 bopd with cumulative production from some wells totaling over 2 million barrels and still producing at high rates. The secondary target of the same well is in the Slave Point formation. Over 300 Slave Point wells have been completed in the area with initial production rates averaging 150 bopd and cumulative production rates ranging in the 120,000 to 150,000 barrel range. The Company may choose to farm-out 50% of its interest in this well. The cost to successfully drill and complete a Granite Wash well is approximately $1,100,000 (net $1,100,000 to Blackdog). Additional costs of about $200,000 would be required to complete a Slave Point zone due to the necessity of a fracture stimulation. Management of the Company believes that a modest Granite Wash well or a medium-case Slave Point well may have a material effect on the Company's cash flow, production and reserves.

To fund these activities, the Company announces that it intends to issue on a non-brokered private placement basis (the "Private Placement") up to four million common shares ("Common Shares") for gross proceeds of up to $1.35 million. Pursuant to the Private Placement, the Company will issue up to three million Common Shares on a "flow-through" basis under the Income Tax Act (Canada) ("Flow-Through Shares") at $0.35 per share and up to one million Common Shares at $0.30 per share. The Company may pay to certain investment professionals, a commission equal to eight percent payable in either cash, Flow-Through Shares or Common Shares of the Company. Closing of the Private Placement is expected to occur on or before August 7, 2008, and is subject to the receipt of all requisite regulatory and stock exchange approvals. The Common Shares and Flow-Through Shares will be subject to a four month hold period from the date of closing. Certain directors and officers of the Company may participate in the Private Placement.

Blackdog is a junior oil and gas company with producing assets in Saskatchewan and Alberta. The Company currently has 13,958,449 Common Shares outstanding.


Certain information regarding the Offering may constitute forward-looking statements under applicable securities laws and necessarily involve certain risks. Specifically, the Company, may not proceed with the aforementioned exploration and development drilling, or may not complete the Private Placement which could have a negative impact on the business of the Company and its ability to meet all of its exploration and development requirements. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements.

The TSX Venture Exchange has neither approved nor disapproved of the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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