Bronco Energy Ltd.

Bronco Energy Ltd.

March 18, 2008 19:42 ET

Bronco Announces Year End Reserves and Battery Start-Up

CALGARY, ALBERTA--(Marketwire - March 18, 2008) - Bronco Energy Ltd. ("Bronco" or the "Company") (TSX:BCF) has received an independent engineering reserves assessment from McDaniel & Associates Consultants Ltd. ("McDaniel") for the Wabiskaw Formation, on lands under lease by Bronco at Wabasca, Alberta.

The Company Share of Remaining Reserves and Net Present Value Before Income Tax are presented in the following table.

Total Company Reserves and Net Present Value Before Income Tax
McDaniel Forecast Prices and Costs as of December 31, 2007
Total Reserves

Company Share
of Remaining
Reserve Reserves Company Share of Net Present Value
Category Reserves (Mboe) Before Income Tax ($M)
0% 5% 10% 15% 20%

Total Proved 7,793 100,075 77,201 60,705 48,338 38,756

Total Proved &
Probable 21,253 500,119 305,322 214,231 161,465 126,609

Total Proved,
Probable, &
Possible 69,915 2,052,456 1,066,900 655,921 443,530 318,284

The analysis is based upon McDaniel's Forecast Prices, effective January 1,
2008. The first five (5) years of the forecast are shown in the table below:

McDaniel & Associates Consultants Ltd.
Price Forecasts
January 1, 2008

US/CAN Heavy
WTI Crude Oil Exchange Rate Crude Oil
Year ($US/bbl) ($US/$CAN) ($C/bbl)
2008 90.00 1.000 55.30
2009 86.70 1.000 53.20
2010 83.20 1.000 50.50
2011 79.60 1.000 48.70
2012 78.50 1.000 48.00

McDaniel's evaluation and the classification of the reserves were conducted as per the guidelines of the Canadian Oil and Gas Evaluation Handbook ("COGEH"). Complete definitions of these reserves classifications can be found within the COGEH. A portion of the reserves, representing less than 1% of proved plus probable, was evaluated internally by Bronco. "Gross Company Share" is defined as a company's working interest share of remaining recoverable reserves before royalty deduction.

The reserve assignment is representative of the development of the Wabiskaw formation for the seventeen (17) sections approved by the ERCB. The subject sections are located in the east block of BCN Reserve 166, only 30% of Bronco's present land base with the BCN. Based on the analogy of Pelican Lake development, McDaniel booked recovery factors of 6% for primary recovery (proved plus probable), 16% for waterflood recovery (probable), and a total of 30% for waterflood and polymer enhanced oil recovery (proved plus probable plus possible). These factors were applied to various portions of the development depending on the execution timing and geological certainty.

The evaluation does not include resources from Bronco's Grand Rapids Oilsands Deposit.

Mr. Rob Ellis, P. Eng., Vice President of Engineering at Bronco, commented, "The reserve report from McDaniel recognizes the upside of the Wabiskaw development on the BCN land including enhanced recovery under a waterflood and polymer scheme."

Bronco's Oil Treating Facility has reached another start-up milestone and is now accepting oil emulsion from the wellpads. Over the next several weeks, production from the wells will be ramped up as operational efficiency improves.

Bronco will be hosting a live conference call on Wednesday, March 19th, starting at 7:00 a.m. MST (9:00 a.m. EST) at 1-866-862-3908. After the live call, playback can be heard at 1-800-408-3053 (passcode 3256382).

Petroleum and natural gas volumes are converted to a common unit of measure on a basis of six thousand cubic feet (Mcf) of gas to one barrel (Bbl) of oil. Boes may be misleading, particularly if used in isolation. The foregoing conversion ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

This news release contains forward-looking statements which involve known and unknown risks, delays and uncertainties not under Bronco's control which may cause actual results, performance or achievements of Bronco to be materially different from the results, performance or expectations implied by these forward-looking statements. Forward-looking statements such as the estimates of reserves, the references to Bronco's exploration program and drilling program and capital expenditures relating to, and timing of, such programs are based on the opinions and estimates 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 anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond Bronco's control, and no assurance can be given that the programs will be completed on time, on budget or at all. In addition, there are numerous uncertainties inherent in estimating reserves, including many factors beyond Bronco's control, and no assurance can be given that the indicated level of reserves or the recovery thereof will be realized. In general, estimates of reserves are based upon a number of factors and assumptions made as of the date on which the estimates were determined, such as geological and engineering estimates which have inherent uncertainties. The reserves estimates for the lands described in this news release may not reflect the same confidence level as estimates of reserves for all of Bronco's lands, due to the effects of aggregation. Further, estimates of net present value do not represent fair market value. Bronco undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements.

Contact Information

  • Bronco Energy Ltd.
    Brian Alford
    President and Chief Executive Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    Bronco Energy Ltd.
    James V. Esposito
    Executive VP and Chief Operating Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    Bronco Energy Ltd.
    Rob Ellis
    Vice President Engineering
    (403) 699-8383
    (403) 693-0038 (FAX)