DeeThree Exploration Ltd.
TSX : DTX

DeeThree Exploration Ltd.

March 22, 2011 18:28 ET

DeeThree Exploration Announces Completion of Strategic Asset Acquisition and Related Matters

CALGARY, ALBERTA--(Marketwire - March 22, 2011) -

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

DeeThree Exploration Ltd. (TSX:DTX) ("DeeThree" or the "Corporation") is pleased to announce that it has completed its previously announced acquisition of certain oil and gas assets for approximately $125 million in cash.

These acquired oil and gas assets have production of approximately 1,830 BOE/d (2010 exit production) of primarily high working interest, operated oil, natural gas and natural gas liquids production and reserves principally situated in Brazeau, West Pembina and the Peace River Arch areas of northern Alberta. The assets consist of approximately 40% light crude oil and natural gas liquids, have proved plus probable reserves of approximately 5.416 MMBOE with a reserve life index of 8.1 years (as of December 31, 2009) and based on current production. The asset package also includes 32,000 net acres of undeveloped land and numerous identified vertical and horizontal drilling locations. Additional information, including more certain reserves information, regarding the assets can be found in the final short form prospectus of the Corporation dated March 4, 2011 and available under the Corporation's profile on SEDAR at www.sedar.com.

Satisfaction of Escrow Release Conditions

DeeThree is also pleased to announce that, further to the previously announced "bought deal" short form prospectus offering of 26,795,000 subscription receipts, all escrow release conditions have been satisfied and the net proceeds of the offering of approximately $111.7 million have been released to the vendors of the Assets as partial payment of the purchase price for the oil and gas assets.

In addition, 26,795,000 DeeThree common shares underlying the subscription receipts have been issued to the holders of subscription receipts through the facilities of CDS Clearing and Depository Services Inc. (other than those certificates representing the underlying DeeThree common shares of subscription receipts sold pursuant to Rule 144A or Rule 506 of Regulation D under the United States Securities Act of 1933, which will be delivered to the holders thereof). A total of 62,752,091 common shares of DeeThree are presently outstanding.

Reader Advisory

Forward-Looking Statements: Certain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: operational decisions and the timing thereof, development and exploration plans and the timing thereof; future production level, quantity of reserves, reserve life index and the anticipated benefits resulting from the transactions described in this press release. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although DeeThree believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information because DeeThree can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of DeeThree to realize the anticipated benefits of the asset acquisition and other transactions; the timely receipt of any required regulatory approvals; the ability of DeeThree to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; DeeThree's ability to operate the properties in a safe, efficient and effective manner; the ability of DeeThree to obtain financing on acceptable terms; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of DeeThree to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. Additionally, the estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. DeeThree undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law.

Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by DeeThree and described in the forward-looking information. The material risk factors affecting DeeThree and its business are contained in DeeThree's Annual Information Form which is available under DeeThree's issuer profile on SEDAR at www.sedar.com. The reader is cautioned not to place undue reliance on this forward-looking information.

Barrel of Oil Equivalent: Where amounts are expressed on a barrel of oil equivalent ("BOE") is, natural gas volumes have been converted to BOE at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent. This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead. Boe figures may be misleading, particularly if used in isolation.

Reserve Information: The aforementioned reserves information is based on an independent engineering evaluation report prepared by GLJ Petroleum Consultants Ltd. effective December 31, 2009.

Contact Information

  • DeeThree Exploration Ltd.
    Martin Cheyne
    President and Chief Executive Officer
    (403) 263-9130