3P International Energy Corp.

3P International Energy Corp.

September 06, 2011 13:56 ET

CORRECTION FROM SOURCE: 3P International Energy Corp. Completes Acquisition of JSC Tysagaz

-- Acquires 4 Gas Licenses in Western Ukraine

-- Acquisition Provides Immediate Cashflow and Proven Reserves

-- 300 Sq. Km Exploration and Development Opportunities

-- Platform for Further Growth in Eastern Europe

TORONTO, ONTARIO--(Marketwire - Sept. 6, 2011) - A correction from source is being issued for the press release that was disseminated at 11:07 ET on September 6, 2011 due to an error in the seventh paragraph of the press release. 3P International Energy Corp. expects its first well to spud in early 2012, and not 2013. The complete and correct release follows.

3P International Energy Corp. (the "Corporation" or "3P") (TSX VENTURE:DOH) is pleased to announce that it has completed the previously announced acquisition of JSC Tysagaz for a purchase price of USD $17,000,000, subject to working capital adjustments. The entering into of a definitive purchase agreement to acquire Tysagaz was announced by 3P on May 24, 2011, and the definitive purchase agreement and all amendments have been filed on www.sedar.com.

Overview of JSC Tysagaz

Tysagaz is an operating company in Western Ukraine with all required permits, technical and human resources for oil and gas exploration, production and marketing. The company's head office is located in Uzhgorod-city Ukraine (regional center of the Transcarpathian region). The company was established in order to explore and develop natural gas properties in the Transcarpathian region of Western Ukraine. The Transcarpathian Basin is a 7,500km2 region bordering Hungary, Slovakia, Romania, and a subset of the prolific Pannonian and Carpathian basins.

Tysagaz's core assets are 4 natural gas licences. The Rusko-Komarivske licence includes two producing wells, and gas treatment facilities that are connected into regional gas pipelines. Three exploration licences with 300 sq.km have been previously drilled and include gas discoveries from the Soviet exploration period. The area has been well studied and documented, with shallow reservoirs (under 1500m). Tysagaz in particular offers a balance of proved reserves with the ability to convert a considerable amount of contingent resources to the proved/probable category fairly quickly. Based on Tysagaz's approved and permitted development plan, up to five shallow wells are permitted to be drilled/recompleted in 2012.

Ron MacMicken, President and CEO stated "Tysagaz is a unique platform which propels us into the gas business in the Ukraine. This asset provides the foundation for us to build on our stated business plan of exploiting proved undeveloped assets in shallow basins in the Ukraine and Eastern Europe. Tysagaz has a unique mix of proved producing reserves and proved undeveloped reserves that present low risk work over activities (perforation cleanouts on the 2 producing wells) and shallow drilling that we believe could significantly enhance current production of 350 Mcf/d to 5.0 MMcf/d in 2012. An exploration program on the 300 sq.km licence areas we have acquired surrounding these producing reserves is planned as well. This region is off the beaten path and one which is underexplored, providing an opportunity to acquire further licences. The Tysagaz management team, with 10 years of production experience in the Transcarpathian basin, provides a solid operating platform to grow the business in the region."

Sproule Reserve Report Rusko-Komarivske and Stanivske Fields

As previously announced by press release dated July 14, 2011, Sproule International Limited ("Sproule") has completed an independent reserves assessment and evaluation of Tysagaz assets, in accordance with National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities, ("NI 51-101"), having an effective date of April 30, 2011 (the "Reserve Report"). The Reserve Report was commissioned to focus solely on the lone producing field, the Rusko-Komarivske Field and one area of the Stanivske Block. There are 3 other significant licence areas being acquired for a total of 300 sq.km including the Stanivske Field which also has all the required infrastructure and a discovery management believes has significant development potential as well. The following table provides a summary of the Sproule reserve assessment as at April 30, 2011.

Summary of the Evaluation of the Natural Gas Reserves in Rusko-Komarivske and Stanivske Fields, Ukraine
(As of April 30, 2011)
Remaining Reserves Net Present Value
WI 100% After Income Taxes (million $CDN)
Project Gross Net (AT) At 10%
Associated and Non-Associated Gas (MMcf)
Proved Developed Producing 244 244 244 $ 707
Proved Undeveloped 3,194 3,194 3,194 $ 5,368
Total Proved 3,438 3,438 3,438 $ 6,075
Total Proved + Probable 11,885 11,885 11,885 $ 21,278
Total Proved + Probable + Possible 22,876 22,876 22,876 $ 36,913
BOE (Mbbl)
Proved Developed Producing 41 41 41 $ 707
Proved Undeveloped 532 532 532 $ 5,368
Total Proved 573 573 573 $ 6,075
Total Proved + Probable 1,981 1,981 1,981 $ 21,278
Total Proved + Probable + Possible 3,813 3,813 3,813 $ 36,913
(1) Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is a 10% probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves.
(2) Production volumes and reserve information are commonly expressed on a barrel of oil equivalent ("BOE") basis. BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
(3) Estimated net present values do not represent fair market value.
(4) Net Operating Income = Sales revenue – rents & royalties – well operating costs – gathering & processing – transportation & blend fee.
(5) "BCF" means Billion Cubic Feet.

Final reserve information for the Tysagaz assets, effective as at June 30, 2011, will be disclosed in the Statement of Reserves of 3P in accordance with NI 51-101, which will be filed on SEDAR concurrent with the release and filing of the Company's annual financial statements for the year ended June 30, 2011.

Greg Cameron, Chairman stated "We are confident that the Tysagaz properties have significant low risk development potential. Phase One of a detailed development program is underway with the reprocessing of old seismic and a petrophysical analysis that will determine the ultimate location for the first development wells on the Rusko-Komarivske field. We expect our first well to spud early 2012 and drilling will continue on both the Rusko-Komarivske and Stanivske Fields through-out the year. This development program will focus solely on the area Sproule provided the NI 51-101 Reserve Report on and represents only 3% of the acquired acreage. Simultaneously an exploration program including seismic and related work to determine promising leads is planned adding further exploration drilling targets underpinning our initial development plan. With Gas prices on our current production in excess of $10.00 Mcf with a Net Operating Income of $6.00 Mcf our initial focus will be to enhance production and drive cash flow all the while adding to our reserve base."

Management believes each development well drilled should add in excess 2.5 BCF of reserves and provide significant cash flow and return to shareholders. A corporate presentation can be found on our website www.3pintlenergy.com highlighting our development plans and expected outcomes.

About 3P International Energy Corp.

3P International Energy is a Canadian-based company focused on the exploration and development of oil and gas reserves in Eastern Europe. In the Transcarpathian basin of Ukraine, 3P is the 100% owner and operator of a 20 year production licence with a gas producing asset, as well as three exploration licences with exploration targets and a further development opportunity on a total of 300 sq.km. In the Donetsk basin of Ukraine, 3P has a farm-in agreement on a 512 sq.km CBM property. The company's strategy is to use proven technology, capital, and expertise to grow the reserves base and build a portfolio of low cost gas production assets in Eastern Europe to capitalize on high regional gas prices. 3P shares are traded on the TSX Venture Exchange under the stock symbol DOH.

On behalf of the board of Directors

Gregory M. Cameron, Chairman

Forward-Looking Information

This press release may contain forward-looking statements based on assumptions, uncertainties and management's best estimates of future events. All statements that address future activities, events or developments that the Corporation believes, expects or anticipates will or may occur are forward-looking information. Forward-looking information is based upon assumptions by management that are subject to known and unknown risks and uncertainties beyond the Corporation's control. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment, based on a number of assumptions, estimates and variable factors, that the reserves described exist in the quantities predicted or estimated and can be profitably produced in the future.

Although the Corporation believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that outcomes anticipated in the forward-looking information will occur and actual results may differ materially. Many factors could cause the Corporation's actual results to differ materially from those expressed or implied in any forward-looking statements made by it. Accordingly, readers should not place undue reliance on forward-looking information. These forward-looking statements are made as of the date of this press release and the Corporation undertakes no obligations to update publicly or otherwise revise any forward-looking information, except as may be required by law. For a more detailed discussion of such risks and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, refer to the corporation's filings with the Canadian securities regulators available on www.sedar.com.

Neither the 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.

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