Cannon Oil & Gas Ltd.
TSX VENTURE : COO

November 10, 2006 17:40 ET

Cannon Oil & Gas Ltd.: Operational Update

CALGARY, ALBERTA--(CCNMatthews - Nov. 10, 2006) - Cannon Oil & Gas Ltd. (TSX VENTURE:COO) ("Cannon") is pleased to announce that drilling is underway on the first of three wells planned to be drilled during the fourth quarter on its Trutch property in north-east British Columbia. These wells are expected to take advantage of the British Columbia summer drilling royalty incentive program.

Currently, the property is producing approximately 140 boe/d (net) from five wells. Work to tie-in two gas wells that were drilled during the first part of the year is also nearing completion. These wells are expected to add an incremental 70 boe/d net to Cannon.

Recently announced successful wells north of our lands confirm the northern extension of the Halfway pool. Further development on our lands to the north of our existing wells is anticipated during the first quarter of 2007. With Good Engineering Practice approval in place; up to 70 wells can be drilled to fully develop the pool.

In the Luseland area of Saskatchewan, current production has increased to approximately 45 bop/d (net) from two wells. Cannon and its partner are outlining a 3D seismic program to further confirm several additional locations on our lands. Cannon has a 50% interest in more than 11,500 acres of P & NG leases in the area.

Certain statements in this material may be "forward-looking statements" including outlook on oil and gas prices, estimates of future production, estimated completion dates of acquisitions and construction and development projects, business plans for drilling and exploration, estimated amount and timing of capital expenditures and anticipated future debt levels and royalty rates. Information concerning reserves contained in this material may also be deemed forward-looking statements as such estimates involve the implied assessment that the resources described can be profitably produced in the future. These statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated by Cannon.

The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

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

Contact Information

  • Cannon Oil & Gas Ltd.
    Robert J. Tessari
    President & Chief Executive Officer
    (403) 237-8407