Canoel International Energy Ltd.
TSX VENTURE : CIL

Canoel International Energy Ltd.

April 06, 2011 09:00 ET

Canoel Gives Update About Its Argentinean Assets

CALGARY, ALBERTA--(Marketwire - April 6, 2011) -

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Canoel International Energy Ltd. ("Canoel" or the "Company") (TSX VENTURE:CIL) is pleased to announce positive development in its Argentina properties acquired in July 2010.

The investments are comprised of 100% interest in the Don Alberto and Don Ernesto fields in the San Jorge basin in the Province of Chubut, Argentina.

Canoel has hired a new team in Argentina to manage the properties, including a new head geologist and a new petroleum engineer, both having a good understanding of the Don Alberto and Don Ernesto fields and the San Jorge basin, and further work on the Don Alberto and Don Ernesto fields is being planned.

During the Q4 of our fiscal year ending in March 2011, Canoel has performed works under the direction of the new team.

During the month of March 2011, the last month of Canoel's recently completed financial year, production of crude oil from the properties was 4,962 barrels, which represents an increase of 47 % from to the monthly average of production for the previous 11 months of the same fiscal year, which was 3364 barrels per month.

Oil produced from the properties is "Escalante grade" with an API between 18.5 and 23 and which is not paraffinic. Oil production goes through field infrastructure to batteries owned by Canoel, while the final pipeline to the port is owned by YPF and the Terminal.

Oil prices in Argentina are the results of complicated formulas that are set by refineries based on instructions or decrees from the government as crude oil and petroleum products prices in Argentina are capped by the Government at variable levels. When Canoel acquired the properties, the price for crude oil produced from the properties was approximately US$ 46.00 per barrel. The price paid for production from the properties is now approximately US $53.00.

Of the total US$ 2,843,003 purchase price for the properties, US$ 443,003.00 was payable by way of a promissory note due March 22, 2011, and US$ 1,000,000 was payable by way of a promissory note due July 22, 2011. Canoel has paid all amount owning under the promissory note due March 22, 2011.

There is no certainty that the production increase in Argentina can be sustainable or that the prices of crude oil in Argentina will continue to increase.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Canoel International Energy Ltd.
    Jose Ramon Lopez Portillo
    Chairman of the Board
    (403) 938 8154
    or
    Canoel International Energy Ltd.
    Andrea Cattaneo
    CEO & President
    (403) 938 8154
    info@canoelenergy.com