Crocotta Energy Inc.
TSX : CTA

Crocotta Energy Inc.

March 20, 2008 06:00 ET

Crocotta Energy Announces Year-End Reserves

CALGARY, ALBERTA--(Marketwire - March 20, 2008) - Crocotta Energy Inc. ("Crocotta") (TSX:CTA) is pleased to announce its 2007 Year-end Reserves.

Crocotta's focus for 2007 was to make acquisitions that would position the company with a large land base, a solid reserve base and infrastructure in key focus areas. Crocotta's two main acquisitions (Eastshore and Diamond Tree ) fit in perfectly with the Company's strategy and has, on a combined basis, resulted in the company being able to assemble a significant position within the highly sought after West Central Alberta area. Crocotta's properties within this area are summarized below:

- High netback sweet light oil and liquids rich natural gas

- Reserve base comprised of 61% natural gas and 39% light oil and NGLs

- An average 70% working interest with over 95% of production operated by Crocotta

- A large number of unbooked locations on a significant undeveloped land base that will allow for future growth in reserves

- Facilities and pipelines infrastructure that will allow for more efficient capital programs as well as opportunities to reduce operating costs

Reserves Summary

Crocotta's December 31, 2007 reserves as prepared by the independent reserve engineering firm GLJ Petroleum Consultants Ltd. ("GLJ") and based on the GLJ (2008-01) future price forecast are as follows:



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Light Oil Natural gas liquids
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Company Company
Interest Net Interest Net
(Mbbl) (Mbbl) (Mbbl) (Mbbl)
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Proved
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Producing 487 418 381 256
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Non-producing 39 34 84 53
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Undeveloped 409 330 54 35
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Total proved 935 782 520 343
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Probable 478 421 168 111
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Total proved & probable 1,414 1,203 688 454
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Barrels of oil
Natural gas equivalent
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Company Company
Interest Net Interest Net
(Mmcf) (Mmcf) (Mboe) (Mboe)
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Proved
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Producing 9,784 7,812 2,500 1,976
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Non-producing 3,293 2,425 672 491
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Undeveloped 1,257 938 673 521
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Total proved 14,334 11,176 3,844 2,988
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Probable 5,511 4,302 1,565 1,250
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Total proved & probable 19,845 15,478 5,409 4,237
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Notes:

(1) "Company Interest" reserves means, Crocotta's working interest
(operating and non-operating) share before deduction of royalties and
including any royalty interest of Crocotta.
(2) "Net" reserves means, Crocotta's working interest (operated and
non-operated) share after deduction of royalties, plus Crocotta'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 oil.
(4) Numbers may not add due to rounding.
(5) Undeveloped reserves include 465 mboe for the Niton waterflood that
would be reclassified to proved producing as of Q108.


Reserves Values

The estimated future net revenues before taxes associated with Crocotta's reserves effective December 31, 2007 and based on the GLJ (2008-01) future price forecast are summarized in the following table:



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($000s) 0% DCF 5% DCF 10% DCF 15% DCF
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Proved
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Producing 82,409 70,032 61,712 55,679
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Non-Producing 15,199 11,220 8,668 6,931
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Undeveloped 25,953 22,228 19,565 17,547
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Total Proved 123,561 103,480 89,944 80,157
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Probable 50,961 35,959 27,354 21,864
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Total proved &
probable 174,522 139,439 117,298 102,021
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Price Forecast

The GLJ (2008-01) price forecast for the next 5 years is as follows:

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Natural Gas at
WTI @ Cushing Edmonton Light AECO
Year ($US / Bbl) ($Cdn / Bbl) ($Cdn / Mmbtu)
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2008 92.00 91.10 6.75
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2009 88.00 87.10 7.55
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2010 84.00 83.10 7.60
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2011 82.00 81.10 7.60
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2012 82.00 81.10 7.60
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Net Asset Value

Crocotta's net asset value ("NAV") as at December 31, 2007 and based on the
GLJ (2008-01) future price forecast is as follows:

($000s, except per share amounts)
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Pre-tax present value of proved & probable reserves @ 10% 117,298
Undeveloped land (69,900 net acres) (1) 13,980
Land not included above (2) 2,662
Working capital deficiency (11,455)
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Net asset value 122,485

Shares outstanding (basic) 33,045
Net asset value per share $ 3.71
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Notes:

(1) Land values included at $200/acre. Recent land sales in Crocotta's
areas have been significantly higher than $200/acre.
(2) Certain lands were subject to a put/call agreement that was exercised
in Q108. Actual sales value is provided for inclusion in the NAV
calculation.


Q108 Reserve Additions

Crocotta has previously announced a successful late fall and Q108 drilling program of which the majority has not been included in the year-end reserve report. Of particular note, discoveries in the Smoky area of Alberta that were drilled through year-end and early January were excluded from the 2007 year-end report.

Forward-Looking Statements

This Press Release may contain forward-looking information that involves a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. For this purpose, any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. Such risks and uncertainties include, but are not limited to: risks associated with the oil and gas industry (e.g. - operational risks in exploration, development and production; changes and/or delays in the development of capital assets; uncertainty of estimates and projections relating to production and costs; commodity price fluctuations; environmental risks; and industry competition).

The process of evaluating reserves is inherently complex. It requires significant judgements and decisions based on available geological, geophysical, engineering and economic data. As circumstances change and additional data becomes available, reserve estimates also change. Estimates are reviewed and revised, either upward or downward, as warranted by the new information. Revisions are often required due to changes in well performance, prices, economic conditions and governmental restrictions. Revisions to reserve estimates can arise from changes in year-end prices, reservoir performance and geologic conditions or production. These revisions can be either positive or negative.

BOE Conversions

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.

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)
    Website: www.crocotta.ca