BrazAlta Resources Corp.
TSX VENTURE : BRX

BrazAlta Resources Corp.

December 04, 2007 09:30 ET

BrazAlta Resources Corp. Announces Fifth Long-Term Drilling Services Contract With Petrobras

CALGARY, ALBERTA--(Marketwire - Dec. 4, 2007) - BrazAlta Resources Corp. ("BrazAlta" or the "Corporation") (TSX VENTURE:BRX) is pleased to announce that its oilfield services subsidiary, BCH Ltd. ("BCH"), has been awarded its fifth multi-year contract with Petroleo Brasiliero S.A. ("Petrobras") for the provision of a drilling rig and related services.

The contract is for the provision of one on-shore single drilling rig and related crew and is for a period of 3 years. This contract brings BCH's total contracted fleet with Petrobras to five. It is expected the contract will generate gross revenues of approximately $4.5 million US in fiscal 2008, $6.3 million US in fiscal 2009, $6.3 million in fiscal 2010, and the balance of $3.7 million US in fiscal 2010, for a total of $20.8 million US. The contract is a fixed day-rate contract and the gross margins expected to be realized are in-line with the commercial norms of the industry for similar work in similar operating environments. With the addition of this contract the expected gross revenue for the five drilling contracts currently in place with Petrobras is approximately $100million US over the next three years.

BCH Drilling Services Update

The Corporation also confirms both BCH-03 and BCH-04 are in Brazil. BCH-03 is currently conducting drilling operations for BrazAlta on well 51-01, and is expected to drill the main hole of well 235-01 by the end of December 2007. BCH-04 is mobilizing within Brazil and is scheduled to start drilling operations for Petrobras by mid December 2007.

BCH Service Rig SR-101 is now fully operational and performed two completions and one workover operation in the month of November.

BCH-06, a newly constructed 2,800 meter double, has been mobilized to Houston and is expected to leave for Brazil by December 7, 2007. BCH-06 will service Petrobras under the above noted contract until it is replaced with a single drilling rig as per contract specifications. At that time it is expected BCH-06 will return to work for BrazAlta.

The construction of BCH-05, a 3,200 meter diesel electric double, is nearing completion and is also expected to be shipped to Brazil before the end 2007.

BrazAlta is a publicly traded Canadian based international oil and gas corporation with operations in Brazil, Northern Ireland and Canada.

BCH is BrazAlta's drilling services subsidiary which provides drilling and workover services in Brazil.

This press release may contain statements within the meaning of safe harbour provisions as defined under US Laws and Regulations. The above statements are based on the current expectations and beliefs of BrazAlta's management and are subject to a number of risks and uncertainties that may cause the actual results to differ materially from those described above. BrazAlta does not undertake any responsibility with regard to the accuracy of this press release nor the obligation to update the abovementioned information.

This press release contains certain forward-looking statements within the meaning of applicable securities law. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Corporation cannot assure that actual results will be consistent with these forward looking statements. They are made as of the date hereof and are subject to change and the Corporation assumes no obligation to revise or update them to reflect new circumstances, except as required by law. Prospective investors should not place undue reliance on forward looking statements. These factors include the inherent risks involved in the exploration for and development of crude oil and natural gas properties, the uncertainties involved in interpreting drilling results and other geological and geophysical data, fluctuating energy prices, the possibility of cost overruns or unanticipated costs or delays and other uncertainties associated with the oil and gas industry. Other risk factors could include risks associated with negotiating with foreign governments as well as country risk associated with conducting international activities, and other factors, many of which are beyond the control of the Corporation. A barrel of oil equivalent (boe) is derived by converting gas to oil in the ratio of six thousand cubic feet of gas to oil and may be misleading, particularly if used in isolation. A boe conversion is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead, especially in various international jurisdictions.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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