Drake Pacific Enterprises Ltd.
TSX VENTURE : DPE

Drake Pacific Enterprises Ltd.

June 01, 2009 17:54 ET

Drake Pacific Enterprises Ltd. Reports Operations Update

CALGARY, ALBERTA--(Marketwire - June 1, 2009) -

Attention Business/Financial Editors:

DISPOSITION

Drake Pacific Enterprises Ltd. ("Drake" or "the Company") (TSX VENTURE:DPE) has completed the previously announced (May 13, 2009) sale of its producing Carmangay assets to a group of private oil and gas companies for approximately $2,250,000. The transaction was completed in late May and is effective April 1, 2009. Carmangay's net production to Drake was approximately 45 barrels of oil per day and 20 thousand cubic feet of natural gas for a total of 48 barrels of oil equivalent per day (Boed).

The Carmangay sale had an effective price of $47,000 per producing Boed. As a point of reference DPE is now reviewing acquisitions in the range of $15,000 to $25,000 per producing Boed.

ACQUISITION

DPE has completed the acquisition of a blended 26% working interest in our Sousa production from a private oil and gas company for $400,000, in the form of $175,000 cash and $225,000 release of receivables. The transaction was completed in late May and is effective March 31, 2009. This acquisition will add approximately 45 Boed (34% oil).

The current acquisition has an effective price of $8,900 per Boed and its proved and probable reserves (NPV 10%) value is approximately $1,100,000 based on the evaluation at March, 2009 by Sproule and Associates.

OPERATIONS

As a result of the current natural gas prices, a number of wells have been temporarily shut in to conserve reserves and control costs. Approximately 40 Boed have been shut in and there is an additional 10 Boed under review. With the completion of the recent disposition and acquisition and recent shut-ins, DPE has current production of approximately 240 Boed with some additional production expected from the new 11-12 well when it ramps up to full production in June.

This summer the Company's focus will continue to be on cost control, undervalued acquisitions, a number of exploitation projects and prudent financial management.

MANAGEMENT UPDATE

Effective May 15, 2009 DPE announces it has significantly strengthened its management with the following appointment.

Greg Hodgson, P. Eng as Vice-President, Engineering. Mr. Hodgson is the former Vice President Operations of Twin Butte Energy Inc. Mr. Hodgson has over twenty years of experience throughout western Canada in the oil and gas industry and has worked as an executive and/or manager for Standard Energy Inc, Prairie Schooner Petroleum Ltd., Penn West Petroleum, Anderson Exploration, and Home Oil, among others.

"Strengthening our balance sheet, maintaining production, and continuing to pursue undervalued acquisitions has enabled us to continue to grow and add value to the Company during these challenging times." said Drake president, Mr. Roger Penner.

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

Contact Information

  • Drake Pacific Enterprises Ltd.
    Neil Orr
    V.P., Business Development
    (403) 263-2173, Ext - 785
    (403) 263-8254 (FAX)
    Email: norr@drakepacific.com