EnerGulf Resources Inc.

EnerGulf Resources Inc.

May 11, 2011 03:05 ET

EnerGulf Receives Lotshi Block Prospective Resources Report

DALLAS, TEXAS--(Marketwire - May 11, 2011) - EnerGulf Resources Inc. (TSX VENTURE:ENG)(FRANKFURT:EKS) is pleased to announce that it has received an assessment of the Prospective Resources on EnerGulf's Lotshi Block located in western Democratic Republic of Congo (DRC). The report was prepared by DeGolyer and MacNaughton (D&M), an independent international petroleum consulting firm located in Dallas, Texas (www.demac.com). The report has been prepared in accordance with Canadian NI 51-101 and other Canadian, United States and International standards and covers the potentially recoverable oil on seven oil prospects on the Lotshi Block. The Lotshi Block covers approximately 500 square km of the Les Zones du Bassin Côtier in the onshore coastal salt basin of western DRC. EnerGulf is the operator of the project and has a 90% interest and COHYDRO, the state oil company of the DRC, holds a 10% interest.

The report concludes:

Prospective resources in seven oil prospects have been identified in the Lotshi Block, Democratic Republic of Congo. The prospective resources presented below are based on the statistical aggregation method. Estimates of the gross prospective oil resources, as of December 31, 2010 are summarized as follows, expressed in English units in thousands of barrels (103bbl).

Low (P90) EstimateBest (P50) EstimateHigh (P10) EstimateMean Estimate
Gross Prospective Oil Resources, 103bbl207,679299,368428,573313,176

The next table reports the results by individual prospect and includes the gross Pg (probability of geologic success) adjusted mean estimate prospective oil resources, should these prospects result in successful discoveries and development, expressed in English units in thousands of barrels (103bbl).

Gross Prospective Oil Resources Summary
ProspectLow P90 Estimate (103 bbl)Best P50 Estimate (103 bbl)High P10 Estimate (103 bbl)Mean Estimate(103 bbl)Probability of Geological Success, Pg(decimal)Pg Adjusted Mean Estimate (103 bbl)
Statistical Aggregate207,679299,368428,573313,1760.19861,988

The report does not consider the potential resource contribution from any reservoirs above the Loeme Salt, or from the Chela dolomite. The Chela dolomite is the main reservoir in the giant Rabi-Kounga field in Gabon and in smaller fields nearby in Cabinda. There have also been shows reported in the Chela in other wells near the Lotshi Block, but the stratigraphic position of the Chela directly underneath the Loeme Salt make it a difficult target to map seismically, and therefore for the purposes of this report, it is considered of significant, but secondary importance to the exploration targets considered therein.

DeGloyer MacNaughton will issue an updated report that includes Chela prospective resources when those data are provided, as EnerGulf has not fully developed its Chela prospects to date. The current report covers the targeted Bucomazi, Lucula and other pre-salt reservoirs.

Commenting on the DeGolyer and MacNaughton report, EnerGulf Chairman/CEO, Jeff Greenblum said, "We are very pleased with the DeGolyer and MacNaughton report and the 313 million barrel mean estimate of gross prospective oil resources on our west African pre-salt prospects. We are busy preparing for a September 2011 spud date for our first of an anticipated two or three well drill program. Our prospects are the result of a significant amount of new information and new geologic insights. In addition to the 200 km of new seismic acquired in 2010, we have reprocessed much of the existing seismic and have acquired a significant amount of remote-sensing data, including aeromagnetics, gravity, air-borne radiometric surveys and satellite-borne thematic mapping. This new information, coupled with the geological information emerging from on-going work in adjacent contract areas, has increased our confidence that the Lotshi Block contains all the critical elements for the next significant discovery in the region."

The estimates of the prospective resources have been prepared by D&M, an independent international petroleum consulting firm registered in the State of Texas. The report has been prepared in accordance with Sections 5.9 of NI 51-101, and is based upon D&M's review of technical data including geology, geophysics and reservoir parameters. The Low or P90 estimate is a 90% chance that an estimated quantity, such as prospective resources volume or associate value will be equaled or exceeded. The Best or P50 estimate is a 50% chance that an estimated quantity, such as prospective resources volume or associate value will be equaled or exceeded. The High or P10 estimate is a 10% chance that an estimated quantity, such as prospective resources volume or associate value will be equaled or exceeded. In accordance with petroleum industry standards, the Mean estimate is the probability-weighted average, which typically has a probability in the P45 to P15 range, depending on the variance of prospective resources volume or associated value. Therefore, the probability of a prospect or accumulation containing the probability-weighted average volume or greater is usually between 45 and 15 percent. The mean estimate is the preferred probabilistic estimate of resources volumes.

The D&M Prospective Resources report is available on the Company's website at www.energulf.com and is filed on SEDAR at www.sedar.com. EnerGulf recommends readers refer to the prospective resources report in its entirety as it details the process for determining the prospective resources estimates, the assumptions underpinning the modeling, and defines all of the technical terms used. The prospective resources estimates described in the report and in this release are "undiscovered resources" as defined in the Canadian Oil and Gas Evaluation ("COGE") Handbook. Undiscovered resources are defined as those quantities of oil and gas estimates on a given date to be contained in accumulations yet to be discovered. The estimate of the potentially recoverable portions of undiscovered resources are classified as prospective resources. Prospective resources are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations.

In accordance with Section 5.9 of NI 51-101, the Company declares that there is no certainty that any portion of these prospective resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

EnerGulf Resources Inc. is a publicly traded international oil and gas exploration company focused on maximizing shareholder value by targeting high impact opportunities in the world's most prospective hydrocarbon regions.

On Behalf of the Board of Directors of EnerGulf Resources Inc.

Jeff Greenblum, Chairman and CEO

Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to future expenditures, financing and prospective resource estimates. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the ability to complete contemplated private placements, the timing and amount of expenditures, business conditions, changes in business strategy, regulatory requirements, competition and economic conditions. The Company does not assume the obligation to update any forward-looking statement.

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.

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