Cyries Energy Inc.
TSX : CYS

Cyries Energy Inc.

March 03, 2008 06:00 ET

Cyries Energy Inc. Announces Operational Update

CALGARY, ALBERTA--(Marketwire - March 3, 2008) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Cyries Energy Inc. ("Cyries") (TSX:CYS) is pleased to provide an operational update with regard to its recent exploration and development drilling program. During the past three months Cyries has participated in 20 wells, of which 18 were cased and 2 were abandoned. Cyries' drilling program has, in the opinion of Cyries' management, resulted in substantial gains to Cyries' productive capability. The key developments with respect to the drilling program are as follows:

Gold Creek / Knopcik

In the Gold Creek / Knopcik area Cyries has drilled, cased, completed and tested four gas wells, with the fifth gas well waiting on completion. Three of these wells are currently producing and the fourth well is estimated to commence production in late March. Included in these four wells is a well at Knopcik that tested at 800 boepd from a single zone, a well at Gold Creek that tested at a combined rate of 500 boepd from three zones and another well at Gold Creek that tested at 1500 boepd from a single zone (this well is subject to payout with Cyries' interest reducing to 50% after payout). These four wells are currently expected by Cyries' management to be producing at a restricted combined net rate of 1,800 boepd by the end of March.

Cyries currently expects to drill two more potentially high impact wells in Gold Creek before spring breakup; one well is currently being drilled and the second well should spud in the first week of March. Gold Creek and Knopcik are Cyries' core areas within the Deep Basin and Cyries has ownership in and access to various facilities in the area that are capable of handling increased production volumes.

Wilson Creek

Cyries acquired its interest in the Wilson Creek area pursuant to a corporate acquisition which was completed in late 2007. In the Wilson Creek area Cyries has drilled, cased, completed and tested its first two wells and are currently drilling a third location. The first well evaluated a Glauconite zone which contains 20 meter of vertical gas pay with a horizontal well which tested at 250 boepd. The well has recently commenced production. The second well encountered a prolific Lower Mannville zone that tested at 650 boepd and is part of an existing pool with significant reserves. The second well is expected to commence production in early March. Cyries has a 100% working interest in both wells. Cyries' gas in the area is processed through various non-owned third party facilities and Cyries' believes there is adequate capacity available to handle production from both wells.

Additional Drilling

In other areas Cyries has drilled and cased two Keg River oil wells in the Rainbow Lake area and is drilling a third well which will be a horizontal well testing the Jean Marie zone. All three wells are expected to be completed before spring breakup. Cyries has also drilled and cased six gas wells in the Hotchkiss area, four of which are on production. At Boundary Lake, Cyries has drilled four wells, two wells were cased for gas production and two were abandoned; Cyries plans on drilling an additional two wells with gas targets prior to breakup.

Production

Cyries exited 2007 with production of 11,000 boepd. As a result of Cyries' recent drilling success management of Cyries currently expects to exit Q1 2008 with production of approximately 13,500 boepd.

Cyries Energy Inc. is a publicly traded Canadian energy company involved in the exploration, development and production of natural gas and crude oil in western Canada. Its common shares trade on the TSX under the symbol "CYS".

Strategic Combination with Iteration Energy Ltd.

A joint press release will be issued today by Iteration Energy Ltd. ("Iteration") and Cyries announcing that they have agreed to certain amendments to the previously announced arrangement agreement whereby Iteration agreed to acquire all of the common shares and warrants of Cyries pursuant to an arrangement (the "Arrangement") under the Business Corporations Act (Alberta). The amendments relate principally to increasing the consideration payable by Iteration under the Arrangement.

The Arrangement is subject to regulatory and court approval and the approval by a majority of at least two thirds of holders of common shares and warrants of Cyries, voting as a single class, who vote on the amended Arrangement at the Cyries securityholders meeting to be held on March 7, 2008. Assuming all necessary approvals are obtained, it is anticipated that the amended Arrangement will be completed on March 7, 2008 and in any event no later than March 11, 2008.

In addition, Cyries has been advised by Iteration that it will disseminate a press release today outlining, among other things, their year end reserves and operational information. While the operational information contained in this press release does not contain any information regarding Iteration, it is expected that the combined company will reach a production rate in excess of 22,000 boepd before the end of Q1 2008.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction. The Cyries common shares have not been nor will be registered under the United States Securities Act of 1933, and they may not be offered or sold in the United States absent registration or an exemption from registration.

This news release and the annual information form contain forward-looking statements. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose" or similar words suggesting future outcomes or statements regarding an outlook. Specific forward-looking statements in this press release include, among others, statements pertaining to the following: estimated production capability and rates, timing of future production, estimated timing as to completion of drilling of wells, exploration and development, and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions results of operations or performance. Forward-looking statements are based on current expectations that involve a number of risks and uncertainties which could cause actual events or results to differ materially from those reflected in this news release. These risks and uncertainties include, among other things, changes in general economic, market and business conditions; changes or fluctuations in production levels, commodity prices, currency exchange rates, capital expenditures, reserves or reserves estimates and debt service requirements; changes in legislation; Cyries' ability to comply with current and future environmental or other laws; Cyries' success at the acquisition, exploitation and development of reserves; actions by governmental or regulatory authorities including increasing taxes or other regulations; the ability to obtain all necessary licenses and permits that may be required; competition; and the occurrence of unexpected events involved in the operation and development of oil and gas properties. Forward-looking statements are based on the estimates and opinions of Cyries' management at the time the statements were made. Unless required by applicable law, Cyries assumes no obligation to update forward-looking statements should circumstances or management's estimates change.

Cyries has adopted the standard of 6 mcf:1 boe when converting natural gas to barrels of oil equivalent. Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Cyries Energy Inc.
    Donald F. Archibald
    Chairman & C.E.O.
    (403) 262-9609
    (403) 262-0055 (FAX)