Bronco Energy Ltd.

Bronco Energy Ltd.

March 23, 2006 10:55 ET

Bronco Makes Strategic Acquisition for Bronco/Bigstone Project

CALGARY, ALBERTA--(CCNMatthews - March 23, 2006) - Bronco Energy Ltd. ("Bronco") (TSX VENTURE:BCF) announces that it has executed a Letter of Intent to acquire all of the issued and outstanding shares of Reel Technologies Corporation ("Reel") in consideration for the issuance of a maximum of 1,565,582 Bronco Common Shares and the payment of $855,000 to Reel shareholders. The proposed acquisition is subject to a number of conditions including the approval of the TSX Venture Exchange.

Reel is a privately owned company that owns and operates Reel Drilling Corp. and Reel Pumping Services. Reel's assets include 3 drilling rigs, 2 cement pumping units, 3 cement bulker trailers and 5 oilfield tractor trucks. Single Rigs #1 and #2 are contracted to the end of 2006. Rig #3 is being modified into a Super Single, and custom designed to drill 1800 meter horizontal wells on Bronco's previously announced Bigstone Joint Venture lands. Reel will continue to operate independently as a wholly owned subsidiary of Bronco and will drill all of Bronco's wells. Reel's operation will occupy a minimal amount of Bronco's management time so that Bronco may remain focused on building its oil and gas operations. Reel's management, led by President Mr. Art Brotzell, is an essential element to the acquisition. Mr. Brotzell and Reel's key personnel will seamlessly carry on with the drilling business. Bronco's operations manager, Mr. Ken Ross, with 40 years of worldwide experience, will also be working closely with Mr. Brotzell on the management of Bronco's aggressive drilling program.

There are several strategic advantages to this acquisition, the most prominent of which is the elimination of risks associated with rig availability and capital cost escalation. Bronco will be able to drill more wells at a rapid pace and at reduced costs. Currently, it is expected that well development costs, including drilling, rig moving, trucking, and cementing, could be reduced by up to 40% per well.

Bronco President and CEO Mr. Brian Alford stated: "Bronco is delighted to welcome Mr. Art Brotzell, and his skilled team from Reel to our growing organization. Bronco will be immediately strengthened by additional positive cash flow, faster generation of revenue from new Bronco wells and the reduction of capital expenses. This acquisition will allow for the efficient execution of Bronco's major oil sands development on the Bigstone Reserve and in other areas".

Bronco Energy Ltd. trades on the TSX Venture Exchange under the symbol "BCF".

This news release contains forward-looking statements which involve known and unknown risks, delays and uncertainties not under the Corporation's control which may cause actual results, performance or achievements of the Corporation to be materially different from the results, performance or expectations implied by these forward-looking statements.

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

Contact Information

  • Bronco Energy Ltd.
    Brian Alford
    President and Chief Executive Officer
    (403) 699-8383
    (403) 693-0038 (FAX)
    Bronco Energy Ltd.
    David Johnson
    Chief Financial Officer
    (403) 699-8383
    (403) 693-0038 (FAX)