Exall Energy Corporation

Exall Energy Corporation

October 20, 2009 09:26 ET

Exall Energy Corporation: Construction Commenced on the Marten Mountain Pipeline and Battery Facilities

CALGARY, ALBERTA--(Marketwire - Oct. 20, 2009) - Exall Energy Corporation (TSX:EE) ("Exall" or the "Company") is pleased to announce that pipeline approvals have been received and construction has commenced on an 11 kilometer pipeline that will allow unrestricted production from the Marten Mountain 102/14-1 well that was granted Good Production Practice (GPP) status in June 2009. The pipeline and battery facilities are expected to be completed by mid November 2009. Exall has entered into a non-revolving bridge loan facility with an arm's length lender to fund the construction of the pipeline and battery. The loan facility has a maturity of May 31, 2010, bears interest at 12.5 percent per annum, is subordinate to the Company's bank debt and will allow the Company to draw up to $2,000,000.

An application is being prepared to amend the waterflood approval area to include the Marten Mountain 7-12 well which would result in that well being granted GPP. The 7-12 well will also utilize the new pipeline and battery facilities.

Exall's current production with the 102/14-1 and 7-12 producing at restricted rates is 365 barrels of oil equivalent per day (boe/d). With the completion of the pipeline and the 102/14-1 well producing at unrestricted rates we expect production to increase to 700 boe/d and when the 7-12 well is granted GPP we expect production to increase to 1,100 boe/d. Exall's current production is approximately 70 percent light oil and is expected to increase to approximately 85 percent light oil when the wells are allowed to produce at unrestricted rates.

About Exall

Exall Energy Corporation is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta, British Columbia and Texas. Exall is currently developing a new oil discovery at Marten Mountain in north-central Alberta.

The Company currently has 45,921,227 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory

This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

Natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1). The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

Please visit Exall Energy's website at: www.exall.com.

Contact Information

  • Exall Energy Corporation
    Frank S. Rebeyka
    Vice Chairman & CEO
    Exall Energy Corporation
    Roger N. Dueck
    President & COO
    403-237-7820 x 223