Crocotta Energy Inc.
TSX : CTA

Crocotta Energy Inc.

September 28, 2010 09:57 ET

Crocotta Energy Announces Asset Sale

CALGARY, ALBERTA--(Marketwire - Sept. 28, 2010) - Crocotta Energy Inc. ("Crocotta" or the "Company") (TSX:CTA) is pleased to announce that it has signed an agreement to sell certain assets in Pembina, Niton and Chip Lake located in West Central Alberta ("the Assets") for $28 million cash plus drilling credits and warrants with an estimated value of $2.0 million for total consideration of $30 million.

The production was approximately 530 boepd in July 2010 and had 2.3 mmboe of proved plus probable reserves booked to the properties based on Crocotta's 2009 year-end engineering report. Note that these reserves as quoted above do not include adjustments for 2010 production and any potential changes for commodity pricing, well performance and capital spent on the properties since December 31, 2009.

On completion of the asset sales, Crocotta estimates corporate production will be approximately 2,000 boepd (65% gas and 35% oil and natural gas liquids) and will have pro-forma net debt of approximately $27 million as at September 30, 2010.

Forward-Looking Information

This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.

More particularly and without limitation, this document contains forward looking statements and information relating to the Company's oil, NGLs and natural gas production, oil and natural gas reserves, capital programs, and oil, NGLs, and natural gas commodity prices. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations will prove to be correct. Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

BOE Conversions

Barrels of oil equivalent ("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.

Information Regarding Reserves and Reserves Values

This press release contains information on oil and natural gas reserves and reserve values which are estimates only. . Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves. Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

Contact Information

  • Crocotta Energy Inc.
    Robert Zakresky
    President and Chief Executive Officer
    (403) 538-3736
    or
    Crocotta Energy Inc.
    Nolan Chicoine
    Vice President, Finance and Chief Financial Officer
    (403) 538-3738
    or
    Crocotta Energy Inc.
    700, 639 - 5th Ave SW
    Calgary, Alberta T2P 0M9
    (403) 538-3737
    (403) 538-3735 (FAX)
    www.crocotta.ca