Drake Energy Ltd.

February 04, 2010 09:30 ET

Drake Acquires Sousa and Jenner Assets

CALGARY, ALBERTA--(Marketwire - Feb. 4, 2010) -


Drake Energy Ltd. ("Drake" or "the Company") (TSX VENTURE:DPE) has acquired the remaining 25% working interest in its Sousa property and 40% of the 13-06 Jenner well from a partner, a private oil and gas company which is currently in receivership. The assets were acquired for $250,000 cash and the offset of receivables due from the partner. The transaction was completed on January 27, 2010 and is effective July 1, 2009. This acquisition has a reserve value before tax of proved and probable reserves (NPV 10%) of approximately $3,508,000 based on the evaluation at April 1, 2009 by Fekete Associates Inc. The assets include those that recently underwent drilling and optimization as reported in Drake's February 2, 2010 release.

Sousa Gas Optimization

Drake's optimization program at Sousa included the work at the 11-12 and 13-12 wells, which have seen significant increases in gas production and significant new production of NGLs. Production from the two wells is expected to level out at 300 MCFD with additional NGLs for total production of 52 BOED.

Sousa Oil Program

The Company's oil program at Sousa included the optimization of a producing well at 09-02 and the re-entry of a horizontal well at 01-24. Both programs are nearly completed and currently on production. The approximate current field level production for 09-02 oil well has now stabilized at 20 BBLD. The 01-24 well is still being tested and details should follow next week. Both wells have follow up locations under consideration.

"Sousa is a key area for Drake. This acquisition gives us an effective 100% interest in the area and allows us to pursue our expansion program as quickly and effectively as we can. It adds significant value to our company and resolves a difficult situation with our partner who went into receivership." said Drake president, Mr. Neil Orr.

Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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