Gallic Energy Ltd.
TSX VENTURE : GLC

Gallic Energy Ltd.

March 06, 2012 08:30 ET

Gallic Energy Ltd. to Resume Operations at Ossun-2 Well in France

CALGARY, ALBERTA--(Marketwire - March 6, 2012) - Gallic Energy Ltd. ("Gallic" or "Company") (TSX VENTURE:GLC) is pleased to announce that it has secured a conventional double drilling rig and received government approval to sidetrack the Ossun-2 well located in the Aquitaine Basin in Southern France. Gallic expects the drilling rig to be on-site prior to March 25, 2012 and that well activities will re-commence at this time.

The Ossun-2 well is a re-entry of a Société Nationale des Pétroles d'Aquitaine ("SNPA" a Total SA legacy company) wellbore previously drilled in the late 1960's. The well will be re-entered on existing casing to an approximate depth of 1,100 m where a whipstock will be set and new drilling will commence to an approximate total depth of 3,000 m. In January 2012, Gallic encountered obstructions in the existing casing at a depth of 1,344 m at which point it was determined that the workover rig being used was not sufficient to overcome the obstructions and the well plan required change. The formation targets of the Ossun well are between 1,775 m and 3,000 m. Gallic's main target is the 200 m thick Cretaceous Flysch Carbonate at an approximate depth of 2,700 m where SNPA had previously encountered natural gas shows that were never tested or produced. Well results are expected within 20-60 days from when the new drilling commences at 1,100 m and will be dependent upon testing parameters.

On November 2, 2011, the Company announced results from independent reserve consultants GLJ Petroleum Consultants Ltd. ("GLJ") on the undiscovered petroleum initially-in-place ("UPIIP") (effective September 30, 2011) resource potential for the geologic plays to be tested by the Ossun-2 well. The report indicates the Mean estimate of the distribution of UPIIP for the Ossun-2 play at an unrisked 248 BCF.

Mr. William H. Smith, President and CEO of Gallic, commented "We are pleased to resume operations at the Ossun-2 well after a month delay while we deployed a drilling rig. The new sidetrack plan for the well will allow Gallic to obtain modern open-hole logs over the potential reservoirs. This will give more definitive reservoir information than could the 1960's vintage open-hole logs and the previously planned cased-hole logs. In addition, Gallic is setting its plans for the next well in France which is now expected to be the Hagolle well on our Ledeuix permit. We have developed the Hagolle play to a level where it is presently our next highest rank candidate for drilling".

Gallic has a 100% working interest on its lands (320,000 acres), wells and permits in France.

IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this news release constitute forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe", "schedule" and similar expressions. Forward-looking statements are based upon the opinions and expectations of Gallic as at the effective date of such statements and, in certain cases, information received from or disseminated by third parties. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions and that information received from or disseminated by third parties is reliable, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties (known and unknown) that could cause actual outcomes to differ materially from those anticipated or implied. These factors include, but are not limited to, such things as general economic conditions in Canada, France and elsewhere; volatility of prices for oil and gas; commodity supply and demand; fluctuations in currency and interest rates; inherent risks associated with the exploration and development of oil and gas properties; ultimate recoverability of reserves; production, timing, results and costs of exploration and development activities; political or civil unrest; availability of financial resources or third-party financing; new laws (domestic or foreign); changes in administrative practices; changes in exploration plans or budgets; and availability of personnel and equipment. Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this news release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes.

The forward-looking statements of the Company contained in this news release are expressly qualified, in their entirety, by this cautionary statement. Various risks to which Gallic and its affiliates are exposed in the conduct of their business are described in detail in the Company's Management Discussion and Analysis for the quarter ended September 30, 2011, which has been filed on SEDAR www.SEDAR.com. Subject to applicable securities laws, the Company does not undertake any obligation to publicly revise the forward-looking statements included in this news release to reflect subsequent events or circumstances, except as required by law.

IMPORTANT INFORMATION REGARDING UPIIP AND RESOURCES

Estimates of UPIIP were generally prepared using land and technical information including well information, engineering, geological and geophysical data available from Gallic up to September 30, 2011. There is no certainty that any portion of the resources will be discovered. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources.

The GLJ resource evaluation was prepared in accordance with the procedures and standards contained in the Canadian Oil and Gas Evaluation Handbook. The UPIIP definitions used in preparing this Report are those contained the COGE Handbook and the Canadian Securities Administrators National Instrument 51-101 (NI 51-101). The summary of the disclosure relating to the Ossun - 2 and Azereix-1 wells are as follows:


Play

Well
Formation Low* Estimate (P90) Best* Estimate (P50) Mean* Estimate High* Estimate (P10)


Mountain
Eocene 6 15 22 44
Front Fault Ossun 2 DanoPaleocene 1 3 4 8
Trap Up CretFlysch 62 158 222 453

All figures are given in BCF.

*Low Estimate is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

*Best Estimate is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

*High Estimate is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

*Mean Estimate is the arithmetic average from the probabilistic assessment.

Neither 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

  • Gallic Energy Ltd.
    William H. (Bill) Smith
    President and Chief Executive Officer
    (403) 930-7533

    Gallic Energy Ltd.
    Dean Callaway
    Vice President Finance and Chief Financial Officer
    (403) 930-7534