Flair Petroleum Corporation

Flair Petroleum Corporation

December 04, 2006 12:45 ET

Flair Petroleum Corporation Agrees to Acquire an Estimated 50 Million Recoverable Barrels of Tar Sands Reserves With Processing Facilities in Asphalt Ridge, Utah

CALGARY, ALBERTA--(CCNMatthews - Dec. 4, 2006) - Flair Petroleum Corporation (PINK SHEETS:FPMC) reports that it has entered into an agreement to purchase a 100% working interest in 760 acres containing an estimated 50 million recoverable barrels of tar sands reserves, directly adjacent to the 1380 acres of tar sands leases it has already agreed to purchase, at the Asphalt Ridge Tar Sands deposit located in the prolific Uinta Basin, Utah.

Significantly, this acquisition by Flair also includes a 2,800 barrel per day (bopd) tar sands oil separation facility and refinery which includes a vacuum tower to manufacture high quality asphalts from the bitumen located on site with the relevant engineering and permits in place to become fully operational following upgrades within 6 - 12 months of closing. Proforma cash flow projections demonstrate robust positive cash flow and earnings from asphalt and distillate product sales commencing as early as 2007. The Company has made a non-refundable deposit and expects to enter into a definitive purchase agreement in the near future, subject to completing its technical and legal due diligence.

The Asphalt Ridge Tar Sands deposits are thought to be well-suited to the modified hot-water separation and recovery techniques currently in successful use in Alberta, Canada. The thick, uniform sands of the Mesaverde Group, where Flair's Asphalt Ridge Tar Sands blocks are situated, have been tested to be the best targets for such methods. It is estimated the bituminous sands in the Mesaverde contain 700 million barrels of oil in place. The recovery factors would likely range between 50 to 95% depending on overburden and recovery technique. Thus, total recoverable reserves in the Mesaverde could be at least 350 million barrels of oil. It is estimated that Flair's combined properties at Asphalt Ridge could support a 5 - 10,000 bopd development, corresponding with in-kind upgraded extraction and processing facilities.

Flair plans to open a corporate office in Salt Lake City to focus its business strategy and activities on rapidly commercializing its proven tar sands reserves in Utah, which have ready access to end-user markets.

This news release includes forward-looking statements that reflect Flair Petroleum Corporation's current expectations about its future results, performance, prospects and opportunities. Flair Petroleum Corporation has tried to identify these forward-looking statements by using words and phrases such as "may", "will", "expects", "anticipates", "believes", "intends", "estimates", "should", "typical", "we are confident" or similar expressions. These forward- looking statements are based on information currently available to Flair Petroleum Corporation and are subject to a number of risks, uncertainties and other factors that could cause the corporation's actual results, performance, prospects of opportunities in the remainder of 2006 and beyond, to differ materially from those expressed in, or implied by, these forward-looking statements.

Contact Information

  • Flair Petroleum Corporation
    Larry Podrasky
    Chief Financial Officer
    (403) 399-9498