Canadian Spirit Resources Inc.

Canadian Spirit Resources Inc.

March 19, 2008 06:00 ET

Canadian Spirit Resources Inc. Announces Joint Venture on Montney and Other Deep Prospects

CALGARY, ALBERTA--(Marketwire - March 19, 2008) - Canadian Spirit Resources Inc. ("CSRI" or the "Company") (TSX VENTURE:SPI) (OTCBB:CSPUF) is pleased to announce that it has concluded a joint venture and farmout agreement (the "Agreement") effective March 6, 2008 with a private energy company based in Calgary, Alberta (the "Joint Venture Partner") that will result in the evaluation of CSRI's Montney and other deep rights. The Agreement provides for exploration and drilling activity on formations below the top of the Fernie Group on over 25,000 net acres (the "Deep Rights Lands") of the Company's approximately 40,000 gross acres in the Farrell Creek area of northeast British Columbia. Activity will commence immediately following regulatory approval.

Building on industry drilling success in the Montney Formation, exploration activity and land acquisition is moving in a northwesterly direction with the most recent transaction being immediately south and east of the Company's Farrell Creek project. In a news release dated January 24, 2008, CSRI announced that it had initiated efforts to farm out its deep rights in the Farrell Creek area through a process that called for proposals by February 15th.

Pursuant to the Agreement, the Joint Venture Partner will earn a 65 percent working interest in the Deep Rights Lands by drilling two commitment wells to a minimum Montney Formation depth (the "Earning Wells"). CSRI will retain a 35 percent working interest. The Agreement also provides for a credit to be applied against CSRI's share of future costs which could result in CSRI having no capital obligations through the initial $29 million of gross expenditures including the Earning Wells.

The Joint Venture Partner has an option to increase its working interest in the Deep Rights Lands to 70 percent by increasing the CSRI credit amount.

The Agreement also creates an area of mutual interest governing the relationship between the Company and the Joint Venture Partner regarding any future acquired lands.

Commenting on the transaction, Mr. George Watson, Chairman of CSRI said "We are very pleased to have concluded this joint venture agreement which will result in the exploration of the Company's deep rights at Farrell Creek with an emphasis on the Montney Formation. Our partner brings strong technical, operational and financial capability to bear on our deep rights together with a demonstrated record of successful exploration. We look forward to working with them".

The Joint Venture Partner will be appointed operator with field activity expected to commence following receipt of well licences.

CSRI is a natural resources company focusing on the identification and development of opportunities in the unconventional gas sector of the energy industry. The mission of the Company is to develop 1 tcf of natural gas from unconventional resource plays in western Canada. The Company has identified a 1.8 tcf discovered resource play (see News Release dated May 8, 2007), assembled a unique, 100 percent working interest land position in approximately 40,000 gross acres in northeast British Columbia and is currently evaluating the productive capability of its principal resource property at Farrell Creek, British Columbia.

On behalf of the Board of Directors,


Don Gardner, Chief Executive Officer

The corporate information contained in this news release may contain forward-looking forecast information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonably accurate by CSRI at the time of preparation, may prove to be incorrect. The actual results achieved during the forecast period will vary from the information provided herein and the variations may be material. Consequently there is no representation by CSRI that actual results achieved during the forecast period will be the same in whole or in part as those forecast.

The TSX Venture Exchange has neither approved nor disapproved the information contained herein and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canadian Spirit Resources Inc.
    Don Gardner
    Chief Executive Officer
    (403) 539-5005
    (403) 262-4177 (FAX)
    Canadian Spirit Resources Inc.
    Phil Geiger
    (403) 539-5005
    (403) 262-4177 (FAX)