Crew Energy Inc.

Crew Energy Inc.

March 02, 2005 18:18 ET

Crew Energy Inc. Provides 2004 Reserves and Operational Update




MARCH 2, 2005 - 18:18 ET

Crew Energy Inc. Provides 2004 Reserves and
Operational Update

CALGARY, ALBERTA--(CCNMatthews - March 2, 2005) - Crew Energy Inc.
(TSX:CR) of Calgary, Alberta is pleased to announce the results of its
independent reserve evaluation for the year ended December 31, 2004 as
evaluated by Gilbert Laustsen Jung Associates Ltd. ("GLJ") in accordance
with the rules provided by National Instrument 51-101.


- Crew's production during the fourth quarter of 2004 averaged 3,112
boe/d, a 28% increase over the third quarter of 2004 and 63% over the
fourth quarter of 2003.

- The Company's proven plus probable reserves increased 153% to 9.3
MMboe including 6.8 MMboe of proven reserves.

- Fully diluted reserves per share increased 123% over 2003, added
exclusively through organically generated drilling success.

- Crew's reserve life index (RLI) increased to 8.2 years, an increase of
3 years or 58% over 2003.

- Reserve additions replaced production by 727% on a total proved plus
probable basis.

- The Company's working interest reserves are comprised of 79% natural
gas, 14% natural gas liquids and 7% light oil.

- The net present value of Crew's estimated future revenue, discounted
at 10%, increased by 232% over the previous year.

December December %
31, 2004 31, 2003 change

Annual production (note 1) (boe/d) 2,444 1,820 34
Fourth quarter production (boe/d) 3,112 1,911 63
Working interest reserves (Mboe)
Proved producing 4,974 2,315 115
Total proved 6,755 2,878 135
Proved plus probable 9,257 3,652 153
Net present value before tax of
reserves at 10% discount (M$)
Proved producing 94,044 30,705 206
Total proved 115,676 36,829 214
Proved plus probable 143,519 43,221 232
RLI based on 2004 annual
production (years)
Total proved 7.6 4.3 77
Proved plus probable 10.4 5.5 89
RLI based on annualized Q4-2004
production (years)
Total proved 6.0 4.1 46
Proved plus probable 8.2 5.2 58
(1) Crew began operations on September 2, 2003 upon completion of the
Baytex Energy Ltd. plan of arrangement. The Company's 2003 annual
production is based on Crew's average production from September 2
to December 31, 2003.

Oil and Gas Reserves

The following table provides summary information presented in the GLJ
report effective to December 31, 2004 and based on the GLJ (2005-01)
price forecast. Additional reserve information will be presented in the
Company's fourth quarter and year-end financial results press release
scheduled to be circulated on March 14, 2005 and in the Statement of
Reserve Data and Other Oil and Gas Information section of the Company's
Annual Information form scheduled to be filed on SEDAR prior to March
31, 2005.

Light/medium Natural gas Natural gas Barrels of oil
oil liquids equivalent
Gross Net Gross Net Gross Net Gross Net
(Mbbl) (Mbbl) (Mbbl) (Mbbl) (MMcf) (MMcf) (Mbbl) (Mbbl)

Producing 510 439 623 444 23,046 18,587 4,974 3,981
Non-producing 28 25 98 68 5,636 4,343 1,065 817
Undeveloped 0 0 177 121 3,231 2,572 715 549
Total proved 537 464 899 633 31,913 25,501 6,755 5,347
Probable 138 120 381 266 11,902 9,647 2,502 1,994
Total proved
& probable 675 584 1,280 899 43,815 35,149 9,257 7,341

(1) "Gross" reserves means, Crew's working interest (operating and
non-operating) share before deduction of royalties and without
including any royalty interest of the Company.
(2) "Net" reserves means, Crew's working interest (operated and
non-operated) share after deduction of royalties obligations,
plus Crew's royalty interest in reserves.
(3) Oil equivalent amounts have been calculated using a conversion
rate of six thousand cubic feet of natural gas to one barrel of
(4) May not add due to rounding.

The estimated future net revenues associated with Crew's reserves
effective December 31, 2004 and based on the GLJ (2005 - 01) future
price forecast are summarized in the following table:

0% 5% 10% 15% 20%

Producing 127,911 107,815 94,044 83,998 76,317
Non-producing 20,947 17,210 14,557 12,584 11,062
Undeveloped 13,017 9,395 7,074 5,488 4,347
Total proved 161,875 134,420 115,676 102,070 91,726
Probable 61,264 38,931 27,843 21,445 17,339
Total proved and
probable 223,139 173,351 143,519 123,515 109,065

(1) The estimated future net revenues are stated before deducting
future estimated site restoration costs, but include the Alberta
Royalty Tax Credit, and are reduced for estimated future abandonment
costs and estimated capital for future development associated with
the reserves.
(2) May not add due to rounding.

The GLJ (2005-01) price forecast is summarized as follows:

Edmonton light Natural gas at
Year WTI @ Cushing crude oil AECO-C spot
(US$/bbl) (C$/bbl) (C$/MMbtu)

2005 42.00 50.25 6.60
2006 40.00 47.75 6.35
2007 38.00 45.50 6.15
2008 36.00 43.25 6.00
2009 34.00 40.75 6.00
2010 33.00 39.50 6.00
2011 33.00 39.50 6.00
2012 33.00 39.50 6.00
2013 33.50 40.00 6.10
2014 34.00 40.75 6.20
2015 34.50 41.25 6.30
2016 + +2%/yr +2%/yr +2%/yr

Operations Update

Crew's average production estimate for the first week of March 2005 is
3,900 boe/d, a 25% increase over the fourth quarter 2004 average of
3,112 boe/d. The Company also estimates it currently has an additional
900 boe/d awaiting production start-up.

The Company's exploration and development budget for 2005 is currently
set at $60 million. Crew plans to drill 40 to 50 wells in 2005 of which
30 to 40 will be directed toward development initiatives in its core
areas of Edson, Ferrier, Wimborne and Viking-Kinsella in Alberta and
Laprise in northeast British Columbia. In addition, the Company plans
to drill a minimum of 10 exploratory wells in 2005, generally targeting
gas/condensate reservoirs in the deeper regions of the basin.

The Company is currently engaged in an active first quarter 2005
drilling and facilities construction program. Crew's first quarter
capital program is concentrated on the drilling or completion of 15 to
20 wells. The Company is currently drilling two exploration wells. The
first of these wells (Crew 75% W.I.) is at Edson, Alberta and is
currently targeted to be drilled to a total depth of 3,100 meters. The
second well (Crew 25% W.I.) is at Hanlan, Alberta with a projected total
depth of 4,200 meters. Both of these wells are targeting gas/condensate
from the Winterburn Group.

Crew is actively engaged in two facility expansion projects to
accommodate additional volumes through Crew's existing gas processing
facilities. At Edson, Crew (100% W.I.) plans on installing an
additional 810 bhp compressor that is expected to increase capacity by 7
mmcf/d after the projects completion. At Wimborne, Alberta, Crew (87%
W.I.) is installing an 810 bhp compressor to expand its gas plant
capacity to 7 mmcf/d of low pressure gas.

The Company (58% W.I.) is also participating in the construction of a
new gas plant at Phoenix, Alberta that is scheduled for start-up by the
end of the first quarter. Additionally, the Company is planning the
construction of a 6 mmcf/d gas plant (100% W.I.) at Inga, in northeast
B.C., to accommodate production from its fourth quarter 2004 gas
discovery in that area. Production from this project is expected to
start in late August 2005.

Crew looks forward to reporting its fourth quarter and annual 2004
financial results on March 14, 2005 and further reporting on the
progress of its first quarter 2005 program.

Cautionary Statement

This press release contains forward-looking information relating to
Management's expectations relating to the number of wells, amount and
timing of capital projects, company production, commodity prices,
foreign exchange rates, royalties, operating costs and cash flow. The
reader is cautioned that assumptions used in the preparation of such
information, although considered reasonable by Crew at the time of
preparation, may prove to be incorrect. Actual results achieved during
the forecast period will vary from the information provided herein as a
result of numerous known and unknown risks and uncertainties and other
factors. Such factors include, but are not limited to: general
economic, market and business conditions; industry capacity; competitive
action by other companies; fluctuations in oil and gas prices; the
ability to produce and transport crude oil and natural gas to markets;
the result of exploration and development drilling and related
activities; fluctuation in foreign currency exchange rates; the
imprecision of reserve estimates; the ability of suppliers to meet
commitments; actions by governmental authorities including increases in
taxes; decisions or approvals of administrative tribunals; change in
environmental and other regulations; risks associated with oil and gas
operations; the weather in the Company's areas of operations; and other
factors, many of which are beyond the control of the Company. There is
no representation by Crew that actual results achieved during the
forecast period will be the same in whole or in part as those forecast.

Barrel of oil equivalents or BOEs 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.

Crew is a Calgary, Alberta based junior oil and gas exploration,
development and production company whose shares are traded on The
Toronto Stock Exchange under the trading symbol "CR".


Contact Information

    Crew Energy Inc.
    Dale Shwed
    President and C.E.O.
    (403) 231-8850
    Crew Energy Inc.
    John Leach
    Vice President, Finance and C.F.O.
    (403) 231-8859