Edge Resources Inc.
TSX VENTURE : EDE

Edge Resources Inc.

January 27, 2012 14:51 ET

Edge President Reviews 2011 Achievements and Provides Corporate Update

CALGARY, ALBERTA--(Marketwire - Jan. 27, 2012) - Edge Resources Inc. (TSX VENTURE:EDE) -

Dear Shareholders,

In light of the volatility of the current natural gas market and the associated challenges many of our competitors are facing due to low natural gas prices, I would like to summarize 2011, announce new additions to production and give a view of our strategic and operational outlook for 2012.

I am pleased with the substantial progress that was made in the last year. The projects and accomplishments we made allowed us to achieve all our goals and objectives, despite 2011 being a year of unsettled and turbulent markets - especially in the natural gas market.

Most importantly, Edge achieved and maintained its primary objective of becoming an extremely low-cost producer, which is increasingly important in times when commodity prices are low or volatile. This low-cost advantage has placed the Company in a position of strength versus its competitors and provides a means for Edge to continue its pattern of profitable growth.

In summary, the Company achieved the following in 2011:

  • Production increase of 2,100%, from 27 boe/day in January 2011 to approximately 600 boe/day for January 2012
  • As part of the land-banking strategy the Company increased its land-bank from 11 sections and 1 producing well in January 2011 to over 200 sections that provide an inventory of over 700 potential drilling locations
  • The addition of over 100 bbl/day of oil production from long-life, low-decline reserves
  • NPV10 value increase of 180%, from $16.5 million effective March 2010 to $46.5 million effective March 20111
  • Near doubling of Total Proved Reserves, from 29% effective March 2010 to 58% Total Proved Reserves effective March 20111
  • Increased total credit facilities from $4.5 million to $18 million

Currently the Company remains cash-flow positive and, unlike many of our competitors, Edge does not need to shut in any natural gas wells we operate at today's low prices because of our low-cost operational advantages.

We have constructed, own and operate the majority of our infrastructure, which gives us complete control of our costs and our destiny - a critical factor of success in the natural gas market. Fortunately for Edge, this is not a position many of our competitors find themselves in and they are being forced to shut-in loss-making production at today's prices. We believe that our low-cost advantage has not only served us well for the past year, but positions the Company extremely well to take advantage of what we believe will be a flood of acquisition opportunities in the coming months.

2012 Outlook:

As a result of declining natural gas prices, the importance of having a balance of oil production will help maintain a healthy level of cash-flow and profitability in the near term. The Company has achieved its promise of building a large, contiguous natural-gas-focused land base and is now concentrating significant efforts on maintaining or increasing oil production.

The Company's strategic acquisition of an oil property in 2011 now provides an ideal low-risk growth platform in 2012. The Company is in the process of selecting several shallow, developmental oil locations for its drilling activities in the next few months. Control of infrastructure will prove extremely beneficial on this property, as increased oil production can be efficiently handled by the Company's oil battery and pipelines in this field. Edge intends to more than double oil production in the coming months as a result of this drilling program.

In conclusion, we are exceptionally well positioned to take advantage of the asset base we created in 2011 and 'make lemonade from lemons' in a down natural gas market. We won't sit still and we certainly won't take our eye off the strategic and long-term ball - we're simply applying similar techniques we have refined in the Edmonton Sands to an oil-based asset that we already own. It's a great situation. As usual, we will continue to keep our eyes open for acquisitions that balance both near-term and long-term value for our shareholders. I think we have proven that we're pretty astute acquirers and we don't plan on disappointing in that regard.

Thank you for your continued support.

Brad Nichol, President & Director

Edge Resources Inc.

About Edge Resources Inc.

Edge Resources is focused on the exploration, development and production of shallow oil and natural gas horizons, most prominently from the Edmonton Sands group of formations, a conventional, shallow gas group of reservoirs located in Central Alberta, Canada. The management team's very high success rate is based on the safe, efficient deployment of capital and a proven ability to efficiently execute in shallow formations, which gives Edge Resources a sustainable, low-cost, competitive advantage.

The Alberta Government estimates that there is 44 trillion cubic feet ("TCF") of non-producing, shallow natural gas in Alberta. Edge Resources' management team has evaluated over 20,000 sections of land and has identified over 200 "five-star" sections.

For more information, visit the company website: www.edgeres.com.

1As disclosed in the Company's Reports on Reserves Data prepared by AJM Petroleum Consultants (the Company's Independent Qualified Reserves Evaluator) dated effective March 31, 2010 and March 31, 2011. Consent to this disclosure has been provided by AJM Petroleum Consultants.

This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings which are available at www.sedar.com.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws.

Barrel ("bbl") of oil equivalent ("boe") amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.

Trading in the securities of Edge Resources Inc. should be considered highly speculative.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Edge Resources Inc.
    Brad Nichol
    President & Director
    +1-403-767-9905

    Edge Resources Inc.
    Nathan Steinke
    Chief Financial Officer
    +1-403-767-9905
    www.edgeres.com