Exall Energy Corporation
TSX : EE

Exall Energy Corporation

March 29, 2007 19:10 ET

Exall Energy Updates Operations

CALGARY, ALBERTA--(CCNMatthews - March 29, 2007) - Exall Energy Corporation ("Exall Energy") (TSX:EE) is pleased to update operations of the Company:

- The Company has completed the previously announced acquisition of Kingsmere Exploration Ltd. (CCNMatthews - Feb. 5, 2007).

- Current production for Exall Energy is 168 BOEPD composed of 55% oil and NGL's and 45% gas.

- The five new oil wells in the Jayar program are on production and are expected to add another 50 to 60 BOEPD.

- Drilling operations on the properties acquired through the acquisition of Kingsmere Exploration Ltd. are proceeding and the Company has drilled and cased one well (0.5 net) for oil production. Two wells are drilling and will be completed prior to break-up.

- Four new wells on the Texas gas properties are expected to add 20 BOEPD.

- The Company is debt free and has arranged an operating loan facility of $2 million with a major lender in addition to a $1.6 million convertible debenture financing.

- The Company has an inventory of more than 30 well locations (10 net) to be drilled during 2007 - 2008.

In the Jayar core area, the Company has participated in the drilling and casing of five non-operated wells at 14.5% WI. The operator of the project (Twin Butte Increasing Production - Nickle's Daily Oil Bulletin, Feb 1, 2007) had previously announced that all wells have met or exceeded initial expectations. All wells have now been completed and tied in. The second stage of our two-stage facility expansion was slightly delayed by equipment delivery but work was completed in late March, increasing the plant capacity to approximately 4.5 MMcf/d and allowing the last two wells to come on stream March 23rd. All new Jayar wells are now on production and are currently being optimized.

As a result of recent drilling at Jayar the Alberta Energy and Utilities Board (EUB) has expanded the regulatory pool boundaries, resulting in an increase in its original oil in-place (OOIP) of 73% to over 37.5 million barrels with a pool recovery to-date of approximately 4.7% of OOIP. Correspondingly, the EUB original gas in-place has increased by 70% to 40 Bcf, with cumulative production to-date of approximately 14 Bcf. Based on the drilling results the operator intends to proceed with a down-spacing application to increase well density to two wells per quarter section, from the current one well per quarter section. Down-spacing could provide the Company with over 20 low-risk drilling locations and is expected to have a material impact on the Company's net asset value.

On the SB Harris and Layton, TX, properties, Exall Energy has participated in the drilling of four new gas wells (net 0.2 wells). The wells have been completed and are on stream, adding approximately 20 BOEPD to the Company.

Drilling operations on the properties acquired through the acquisition of Kingsmere Exploration Ltd. (CCNMatthews - Feb. 5, 2007) are proceeding and the Company has drilled and cased one well (0.5 net) for oil production. Two wells (1.0 net) are drilling and will be completed prior to break-up. In addition, four wells (2.5 net) are scheduled for drilling through the summer.

The Company has an inventory of more than 30 well locations (10 net) including the planned drilling program at Mitsue, Bow Island and Jayar infill wells.

Contact Information

  • Exall Energy Corporation
    Frank S. Rebeyka
    President and CEO
    (403) 237-7820
    Website: www.exall.com