Drake Energy Ltd.

March 19, 2010 16:05 ET

Drake Energy Ltd.: Press Release

CALGARY, ALBERTA--(Marketwire - March 19, 2010) - Drake Energy Ltd. (TSX VENTURE:DPE)

Production Update

Field production for the Company at the end of February exceeded 250 barrels of oil equivalent (boed) with additional production undergoing optimization throughout the Company. The acquisition of the remaining 25% working interest at Sousa and the successful drilling and optimization program this winter has enabled Drake to increase production from 130 boed at year end to the current levels.

Sousa 01-24 Update

The re-entered 01-24 horizontal well has continued with steady production and averaged over 70 barrels of oil a day for February (including setup and optimization down time). Initial March volumes have been consistently at this rate. Rate optimization and cost cutting efforts will continue on the well over the next few months.

Sousa 13-12 Optimization Update

The optimization of the 13-12 Sousa well has been completed but short-term pipeline shut-ins have curtailed production in February. Resumption of production from this well was begun in mid March.

Jenner Optimization Update

The optimization of the previously shut in Jenner well was unsuccessful in the lower zone. The upper zone re-entry is being considered for Q2.

Line of Credit Increase

The Company has successfully negotiated an increase in its credit facility from $3.8 Million to $4.0 Million. Increased production and cost controls have provided this increase in the level of the bank's confidence.

Direction in 2010

Despite a difficult year in the Alberta oil patch, the Company was able to return to its peak production levels from the prior year but with much stronger oil weighting, stronger cash flows going forward, 100% ownership of its core area and 12 more oil prospects to pursue in the coming year. The new corporate presentation on the website (www.drake-energy.com) has further details.

"The steps we have taken to re-activate our gas production, coupled with our favourable gas hedging program, our focus on oil development and our strong position to acquire undervalued assets have placed the Company in an excellent position for growth." 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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