Cobra Venture Corporation

Cobra Venture Corporation

October 19, 2006 17:08 ET

Cobra Venture Corporation Announces Multi-Well Farm-Out Program in the Stoughton/Viewfield Bakken Light Oil Play SE Saskatchewan; Corporate Update and Proposed Private Placement

CALGARY, ALBERTA--(CCNMatthews - Oct. 19, 2006) - Cobra Venture Corporation (TSX VENTURE:CBV) -

Saskatchewan Farmout Program

Cobra Venture Corporation ("Cobra" or "Corporation") is pleased to announce that it has entered into a multi-well farmout with Acero Energy Inc. ("Acero") of Calgary, Alberta, covering Cobra's lands located in the Stoughton/Viewfield area of Saskatchewan.

Acero is a privately owned, Calgary based oil exploration company with operations in the Stoughton/Viewfield area of SE Saskatchewan. Acero is headed up by former principals of Bison Resources Ltd. By applying unconventional geological interpretations and utilizing modern drilling techniques, the Bison group discovered the Bakken light, sweet oil play in the greater Viewfield area which lead to the further expansion of the play throughout SE Saskatchewan. Relying exclusively on geology and maintaining a hands on approach to business, the team built that company to its eventual sale value in January 2006 of approximately $113.4 MM.

Under the terms of the Cobra/Acero agreement, it is contemplated that Acero will drill a minimum of 3 wells to test the Frobisher and Bakken formations. Acero is currently licensing the first test well, a Frobisher horizontal well that is anticipated to spud in November, 2006 and has planned two additional Bakken horizontal wells to follow.

Cobra has an average 75% working interest in all of the combined lands in the farmout, and has negotiated a gross overriding royalty with no deductions on all production achieved on the subject lands, thereby maximizing the potential revenue without any further capital expenditure.

Corporate Update

SE Saskatchewan (Stoughton/Viewfield Bakken Play)

-$4m exploration program 2006-2007

-lands located in active area in midst of new Bakken light oil discovery

-up to 16 well potential

-farm-out in place with leading exploration team with proven track record of success in the area

Cobra's existing southeast Saskatchewan lands currently produce revenue on a royalty basis, and the company anticipates that a substantial increase in royalty revenues will be generated from the area as a result of the agreement in place with Acero.

Pembina, Alberta

-new natural gas pool discovery in 2006

-$7.5 m exploration program underway, $2.5m expended to date,

-area of mutual interest with operator of approximately 34,560 acres

-9 additional wells planned for 2007

-30 BCF reserve potential in land base

In summer of 2006 Cobra participated in the drilling of two natural gas wells in the Pembina area of Alberta. These wells encountered multiple natural gas zones, and a completion and tie-in program is currently under way.

Pembina 01/05-19-48-8-W5M is anticipated to come on stream in November, 2006 with a production capacity of 500,000 cubic feet per day from the Belly River zone. Pembina 02/10-24-48-9-W5M is currently undergoing completion work on the Paskapoo sands natural gas zone. Cobra has earned a 27-per-cent net interest in each of these two wells.

A third well is currently being licensed for drilling in late fall 2006. Upon the completion of this third well, Cobra will have earned a 40-per-cent working interest in 7 sections in the prospect area, where up to 12 locations have been identified. The fourth and fifth wells on earned lands are currently being licensed by a third party for drilling in the fall of 2006.

Inga, NE British Columbia

-$2.5m exploration program planned for 2007

-acquiring and building land positions defined by underlying seismic anomalies

-1-2 wells to be drilled to test Charlie Lake and Doig formations

-50 BCF reserve potential

Early in the summer of 2006, having reviewed seismic data, Cobra obtained one section of land underlying a significant structure in northeastern British Columbia. Cobra's net working interest is 75 per cent, and additional seismic structures are being reviewed with an intent to accumulating a large land position in the prospect area. A 2 well drill program is being planned for 2007.

Private Placement

Cobra has also negotiated an arm's-length, non-brokered private placement of 400,000 common shares issuable on a flow through basis at a purchase price of $0.25 cents for total proceeds of $100,000 with an individual(s) involved in the Cobra's ongoing development and exploration program. When issued the securities will be subject to a four-month hold period from the date of issuance.

About Cobra Venture Corporation

Cobra is an oil and natural gas production and exploration company currently producing, exploring and developing oil and gas interests in Pembina, Alberta, NE British Columbia and SE Saskatchewan. Cobra is actively involved in prospect generation, and secures working interests at an early stage. Through farm out and royalty agreements Cobra joint ventures with third parties to operate and develop the prospects. Cobra retains key ownership positions in multiple projects and Cobra employs this strategy to minimize shareholder dilution and maximize shareholder asset value.

The above disclosure contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of economic conditions in Canada, industry conditions, increased competition, the lack of available qualified personnel or management, equipment failures, fluctuations in product prices and in foreign exchange or interest rates and stock market volatility. The Corporation's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be give that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits the Corporation will derive there from.

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

Contact Information

  • Cobra Venture Corporation
    Daniel B. Evans
    President and CEO
    (604) 922-2030
    Canadian Toll Free: 1-888-888-9122
    US Toll Free: 1-888-888-9123