Burmis Energy Inc.

Burmis Energy Inc.

February 24, 2005 08:00 ET

Burmis Announces 110 Percent Increase in 2004 Year End Reserves


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: BURMIS ENERGY INC.

TSX SYMBOL: BME

FEBRUARY 24, 2005 - 08:00 ET

Burmis Announces 110 Percent Increase in 2004 Year End
Reserves

CALGARY, ALBERTA--(CCNMatthews - Feb. 24, 2005) - Burmis Energy Inc.
(TSX:BME) ("Burmis") is pleased to provide the following summary
information from its annual independent reserve evaluation. The
engineering evaluation of Burmis' petroleum and natural gas reserves was
completed by McDaniel and Associates Consulting Ltd. for all of the
properties of Burmis effective December 31, 2004. These estimates were
prepared in accordance with National Instrument 51-101 Standards of
Disclosure for Oil and Gas Activities (NI 51-101). Burmis will release
its audited financial results for the period ended December 31, 2004 on
or about March 10, 2005.

HIGHLIGHTS

Highlights from the McDaniel report on Burmis' reserves at December 31,
2004 in comparison to the prior year are:

- An increase of 110 percent in total proved and probable reserves to
3.31 million barrels of oil equivalent;

- An increase of 104 percent in total proved reserves to 2.39 million
barrels of oil equivalent;

- Additions to proved plus probable reserves which replaced 2004 average
production by 580 percent;

- An increase of 172 percent in the net present value (before tax
discounted at 10 percent) of total proved and probable reserves to $52.5
million;

RESERVES

During 2004, Burmis increased gross proved and probable reserves by 110
percent to 3.31 million barrels of oil equivalent compared to 1.58
million barrels of oil equivalent at December 31, 2003. Approximately 59
percent of the Company's gross reserves are natural gas while the
remaining 41 percent of gross reserves are comprised of crude oil and
natural gas liquids.

During 2004, the Company's capital program resulted in proved plus
probable reserve additions totaling 2.09 million barrels of oil
equivalent. This replaces the Company's 2004 estimated average
production of 986 barrels of oil equivalent per day by 580 percent.

At December 31, 2004, Burmis had 779 thousand barrels of oil equivalent
booked as either non-producing or undeveloped. Approximately 60 percent
of these reserves are currently producing or are expected to be on
production by the end of the first quarter of 2005. The future capital
associated with the proved non-producing and undeveloped reserves
included in the 2004 McDaniel report is approximately $3.0 million.

The following tables summarize the Company's gross and net interests in
proved and probable reserves at December 31, 2004 under forecast pricing
assumptions.



Gross (working interest) Reserves Summary at December 31, 2004 (1)
------------------------------------------------------------------------
Light and
Medium Heavy Total Natural Barrels
Crude Crude Crude Gas Natural of Oil
Oil Oil Oil Liquids Gas Equivalent
Reserve Category (mbbl) (mbbl) (mbbl) (mbbl) (mmcf) (mboe)(2)
------------------------------------------------------------------------
Proved
-producing 406 97 503 137 5,819 1,610
-non-producing - - - 152 1,397 384
-undeveloped 140 - 140 69 1,116 395
------------------------------------------------------------------------
Total Proved 546 97 642 358 8,333 2,389
Probable 217 17 234 138 3,302 922
------------------------------------------------------------------------
Proved plus probable 762 114 876 496 11,635 3,311
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Numbers in this table are subject to round off error.
(2) Natural gas is converted to barrels of oil equivalent ("boe") at a
ratio of six thousand cubic feet to one boe.


Net (working interest and royalties receivable less royalties payable)
Reserves Summary at December 31, 2004 (1)
------------------------------------------------------------------------
Light and
Medium Heavy Total Natural Barrels
Crude Crude Crude Gas Natural of Oil
Oil Oil Oil Liquids Gas Equivalent
Reserve Category (mbbl) (mbbl) (mbbl) (mbbl) (mmcf) (mboe)(2)
------------------------------------------------------------------------
Proved
-producing 269 78 347 94 4,626 1,211
-non-producing - - - 125 1,029 296
-undeveloped 84 - 84 48 871 277
------------------------------------------------------------------------
Total Proved 353 78 431 266 6,526 1,784
Probable 146 14 160 101 2,597 694
------------------------------------------------------------------------
Proved plus probable 499 92 590 368 9,123 2,479
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Numbers in this table are subject to round off error.
(2) Natural gas is converted to barrels of oil equivalent ("boe") at a
ratio of six thousand cubic feet to one boe.


NET PRESENT VALUE OF RESERVES

The following table summarizes Burmis' share of the net present value of
its reserves, discounted at 10 percent. The forecast prices used in the
reserve report were McDaniel and Associates Consulting Ltd.'s price
forecast as of January 1, 2005.



Net present value of Company reserves, discounted at 10 percent before
income taxes ($000's) (1,2,3)
------------------------------------------------------------------------
Light and
Medium Heavy Total Natural
Crude Crude Crude Gas Natural
Reserve Category Oil Oil Oil Liquids Gas ARTC Total
------------------------------------------------------------------------
Proved
-producing 8,711 865 9,576 2,373 16,130 1,375 29,454
-non-producing (77) (35) (113) 3,803 3,056 159 6,905
-undeveloped 1,943 - 1,943 1,043 1,539 231 4,756
------------------------------------------------------------------------
Total Proved 10,576 830 11,406 7,220 20,724 1,765 41,114
Probable 3,119 116 3,235 1,685 5,991 480 11,391
------------------------------------------------------------------------
Proved plus
probable 13,695 946 14,641 8,904 26,715 2,245 52,505
------------------------------------------------------------------------
------------------------------------------------------------------------
(1) Utilizes McDaniel and Associates Consulting Ltd. price forecast as
of January 1, 2005, available on mcdan.com.
(2) Values are net of abandonment liabilities.
(3) Numbers in this table are subject to round off error.


Under NI 51-101, proved reserve assignments are based on a 90 percent
certainty that quantities recovered will equal or exceed proved reserve
estimates. Probable reserves are assigned such that there is a minimum
50 percent certainty that quantities recovered will equal or exceed
estimates of proved plus probable reserves. The new standard provides
for a more conservative evaluation of proven and probable reserves,
particularly on new wells where a production history has not been
established.

Burmis has a Reserves Committee comprised of independent board members
which reviews the qualifications and appointment of the independent
reserve evaluators. The committee also reviews the process for providing
information to the evaluators and meets with the independent evaluators
to discuss the procedures used in the independent report, to review
major property assessments and to discuss any areas of risk. The
McDaniel evaluation of the 2004 year-end reserves of Burmis was reviewed
by the Reserves Committee of Burmis and approved by the Company's Board
of Directors on February 23, 2005.

Burmis' Statement of Reserves Data and Other Oil and Gas Information
required under NI 51-101 will be included in the Company's Annual
Information Form which will be filed on SEDAR on or before March 31 2005.

ADVISORY - Certain information regarding Burmis set forth in this
document, including management's assessment of the Company's future
plans and operations, may constitute forward-looking statements under
applicable securities law. By their nature, forward-looking statements
necessarily involve risks associated with oil and gas exploration,
production, marketing, and transportation such as loss of market,
volatility of prices, currency fluctuations, imprecision of reserves
estimates, environmental risks, competition from other producers and
ability to access sufficient capital from internal and external sources.
Readers are cautioned that the assumptions used in the preparation of
forward-looking information and statements, although considered
reasonable at the time may prove to be imprecise. As such, undue
reliance should not be placed on forward-looking statements. Burmis'
actual results and performance could differ materially from those
expressed in or implied by those forward-looking statements.
Accordingly, no assurance can be given that any of the events
anticipated by the forward-looking statements will occur, or if they do
occur, what benefit Burmis will derive therefrom.

In conformity with National Instrument 51-101, Standards of Disclosure
for Oil and Gas Activities, natural gas volumes have been converted to
barrels of oil equivalent ("boe") using a conversion ratio of 6 mcf to 1
bbl. This 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. Readers are cautioned that boe's may be
misleading, particularly if used in isolation.

Estimating reserves requires judgments and decisions based upon
available geological, geophysical, engineering and economic data. These
estimates may change over time as additional information becomes
available or as economic parameters change. This may have either a
positive or negative effect on the future net earnings of the Company.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Burmis Energy Inc.
    Mr. Aidan M. Walsh, P.Eng., MBA
    President and Chief Executive Officer
    (403) 781-7284
    (403) 261-9028 (FAX)
    or
    Burmis Energy Inc.
    Mr. Scott R. Dyck, CA
    Chief Financial Officer
    (403) 781-7217
    (403) 261-9028 (FAX)
    or
    1000, 736 - 6 Avenue S.W.
    Calgary, Alberta
    T2P 3T7
    Email: ir@burmisenergy.ca
    Website: www.burmisenergy.ca