Drake Pacific Enterprises Ltd.

Drake Pacific Enterprises Ltd.

June 16, 2008 09:31 ET

Drake Acquisition and Operational Update

CALGARY, ALBERTA--(Marketwire - June 16, 2008) -


Drake Pacific Enterprises Ltd. (TSX VENTURE:DPE) has entered into a Letter of Intent to acquire all of the outstanding common shares of a private oil and gas company and its related partnerships (PrivateCo) for the consideration of approximately 3,750,000 shares valued at $0.40 and $1,000,000 for a total effective price of $2,500,000.

PrivateCo is currently producing over 70 Boe/d (90% gas), primarily from its operated Red Deer River properties which consist of approximately 420 Mcf/d (net) from the Glauconite and Belly River formations. DPE will also acquire 2,460 net acres of developed and undeveloped land. This additional production will bring DPE's current production levels over 250 Boe/d.

This transaction brings DPE's estimated proved and probable reserves from $6,189,000 (DPE's Sproule and Martin and Brusset Dec 31, 2007 reports) to $9,344,000 (including PrivateCo's AJM Dec 31, 2007 report). These values do not include Swan Hills and Sousa as these properties came on production since year-end and have not yet been assigned reserves.

The acquisition also brings to DPE oil and gas exploitation potential at the Red Deer River, Alberta and Hoosier, Saskatchewan properties.

The transaction is expected to be completed in late June and will be conditional upon regulatory approvals and other typical conditions for this type of transaction. The transaction will be effective June 1, 2008.

Operational Update: Retlaw

In addition to the ongoing program at Sousa, the company has been issued a licence to drill a new well at Retlaw (oil and gas), and will commence this week, with completion expected by the end of Q2, weather permitting.

"With continued successes via the drill bit and this first important step in growth through acquisitions, we are continuing to meet our aggressive targets." said Drake president, Mr. Roger Penner.

Drake Pacific Enterprises Ltd. is active in oil and gas exploration and development throughout Alberta and Saskatchewan. 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 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.

Contact Information

  • Drake Pacific Enterprises Ltd.
    Neil Orr
    V.P. Operations and Business Development
    Email: norr@drakepacific.com