Global Express Energy Inc.
NEX BOARD : GXE.H

October 11, 2005 14:22 ET

Global Express Shares to Recommence Trading on October 12, 2005 as Global Express and Challenger are Proceeding with Proposed Merger; Common Shares to Recommence Trading

CALGARY, ALBERTA--(CCNMatthews - Oct. 11, 2005) - Global Express Energy Inc. (NEX BOARD:GXE.H) ("Global Express" or the "Company") is pleased to announce that the common shares of the Company will recommence trading on the TSX Venture Exchange on October 12, 2005.

Global Express and Challenger Proceeding with Amalgamation

The Company is continuing to pursue its previously announced amalgamation with Challenger Energy Corp. ("Challenger") pursuant to which Global Express and Challenger will amalgamate and each of the Global Express and Challenger shareholders will receive one common share of the amalgamated company for each one common share of Global Express and Challenger formerly held by them. In accordance with the policies of the Exchange, the parties have submitted their draft information circular in respect of the proposed transaction to the Exchange for its review.

It is proposed that, upon completion of the merger of the companies, the Company will trade on the TSX Venture Exchange under the symbol "CHA". Plans are also underway to list the combined entity on the American Stock Exchange ("AMEX"), subject to satisfaction of all requisite listing requirements.

Capitalization of Challenger

Over the course of the past six weeks, Challenger successfully completed a non-brokered financing of 4,548,000 common shares at a price of CDN$0.25 per share for gross proceeds of CDN$1,137,000, and Challenger and Global Express have available to them total funds in excess of CDN$1,700,000 which will provide them with initial capital to commence the pursuit of certain farm-out and participation obligations with Canadian Superior Energy Inc. in Trinidad and offshore Nova Scotia.

Selected Financial Information

The following table sets forth certain unaudited financial information for Challenger as at and for the period from January 1, 2005 up to September 15, 2005 (Global Express has only nominal assets, and the financial information for Global Express is available at www.sedar.com). This information was prepared by management of Challenger and has not been audited.



Challenger
--------------------
From January 1,
2005 up to
September 15, 2005
--------------------
(unaudited)
$CDN
Total Assets $1,769,488
Total Interest Revenue $ 2,508
Total Liabilities $ 10,796
Total Expenses for the period $ 126,756(1)
Share Capital $1,932,000
TOTAL $3,566,444

Note:

(1) All such expenses have been incurred in pursuing the business
combination transaction with Global Express and raising the
private placement funds.


Prospect Analysis on "World Class" Trinidad and Tobago Properties

Challenger has received a prospect analysis report (the "Prospect Analysis") from Chapman Petroleum Engineering Ltd. ("Chapman") dated September 1, 2005 with respect to the "Intrepid" Block 5(c), and Mayaro Bay and Guayaguyare Bay ("M/G") Block in Trinidad and Tobago.

"Intrepid" Block 5(c)

Block 5(c) is located at the East Coast Marine Area, approximately 80 kilometres offshore Trinidad in water depths ranging from 150 to 500 metres. It comprises an area of approximately 80,000 acres. Geologically, it is part of the Columbus Sub-basin, which is known to have over 28 TCF of natural gas, making it one of the most coveted oil and gas basins in the world. The prospective reservoirs on the Block 5(c) "Intrepid" Block are expected by Challenger to be similar to the adjacent Dolphin field which has published reserves of 2.6 TCF and a productive capacity of 400 MMscf/d. Throughout the immediate area, natural gas reservoirs containing 1 to 3 TCF of gas are common.

Under the terms of a participation agreement (the "Participation Agreement") with Canadian Superior Energy Inc. ("Canadian Superior") (TSX/AMEX: SNG) Challenger will pay one third of all costs and expenses paid by Canadian Superior and one third of all costs related to the first three wells drilled, to earn a one quarter interest (25%) in the overall block. After earning, Challenger will share all costs, expenses and revenues at a 25% interest.

The estimated initial capital exposure to Challenger for the initial well on Block 5(c) is approximately US$5,000,000, although these costs may vary depending on Challenger's and Superior's decisions respecting the timing of the drilling of the block. Challenger anticipates that drilling of an initial well in a contemplated three-well program on Block 5(c) would occur within the next three to six months which, if successful, would result in the drilling of an additional two wells on the block over the course of the next three years.

Operating costs are presently estimated at $0.15/Mscf variable costs, $0.30/Mscf for transportation and $120,000/year per well fixed cost.

Mayaro Bay and Guayaguayare Bay ("M/G") Block

The Mayaro Bay and Guayaguayare Bay ("M/G") Block is located just off the oil-prone Eastern shoreline of Trinidad and Tobago and is comprised of approximately 55,000 acres. Geologically, it is also part of the Columbus Sub-basin in the eastern part of the coveted Eastern Venezuela oil basin. Challenger has estimated the "best estimate" resource potential of the Mayaro Bay and Guayaguayare Bay ("M/G") Block, based on 2-D seismic and variations of pool size, net pay and reservoir parameters to be 257 million STB, covering three structures. Chapman's model for analyzing risk is based on 40 million STB reflecting a 40% probability of success on its before risk estimate. Chapman has estimated that, for the unrisked case, 10 wells would be required to drain the reservoirs, resulting in 10 million barrels per well. For the after risk case, six wells have been anticipated, resulting in 6.7 million STB per well.

Under the terms of the Participation Agreement, Challenger will pay one third of all costs relating to the minimum work obligations of Canadian Superior under a farm-out agreement. Pursuant to its participation Challenger will earn 25% of the Canadian Superior earned interest in the Mayaro Bay and Guayaguayare Bay ("M/G") Block.

Challenger's initial net capital exposure for drilling the Mayaro Bay and Guayaguayare Bay ("M/G") Block is estimated to be approximately US$10,000,000, with Challenger's full development costs in the range of US$28,350,000, with estimated operating costs of US$3.00/STB. However, Challenger anticipates that initial exploration by Challenger and Canadian Superior will be focused on Block 5(c).

Offshore Nova Scotia Properties

Chapman has also completed a report on the "Mariner" prospect Offshore Nova Scotia dated March 11, 2005 (the "Chapman Report"). The Chapman Report sets out the economic feasibility of the exploration and development of the "Mariner Block". The overall program evaluated three wells drilled on the primary target, the cretaceous sands. Challenger has entered into an agreement with Canadian Superior whereby Challenger will pay 16.667% of the costs to drill and complete the "Mariner" L-54 well, in order to earn 12.5% interest in the "Mariner" Block. The Chapman Report estimates that total recoverable resources for three proposed wells on the Mic Mac Sands to be 405 BCF of marketable non-associated gas.

The estimated capital expenditures to drill "Mariner" L-54 well is CDN$61,800,000 with two additional wells being estimated at CDN$113,200,000. Tie-ins and facilities would be an additional CDN$117,000,000. Operating costs have been estimated at CDN$2,830,000 per well per year and $1.50/Mscf for gas processing and transportation.

Challenger understands that Canadian Superior continues to evaluate the timing of drilling on the "Mariner" Block. Challenger anticipates that Challenger and Canadian Superior will focus their initial joint operations on the "Intrepid" Block 5(c) Trinidad well(s).

Risks

No reserves have been attributed to the properties listed above and there is currently no commercial production from these properties.

Given the exploration prospects being pursued, investors should be cautioned that an investment in the common shares of the Company may be considered highly speculative. Exploration for, and subsequent exploitation and production of, oil and natural gas involves a high degree of risk, which even the combination of experience, knowledge and careful evaluation of management of the Company may not be able to avoid. There is no assurance that commercial quantities of natural gas and oil will result from the Company's exploration programs.

The Company's operations will be subject to all of the risks normally incidental to the operation and development of natural gas and oil properties and the drilling of natural gas and oil wells including encountering unexpected formations or pressures, blow outs, cratering and fires, all of which could result in personal injuries, loss of life and damage to the property of the Company and others.

The recovery and reserve estimates on the properties are estimates only and actual reserves may be greater or less than those calculated.

Prospect Analysis and Chapman Report

A copy of the Prospect Analysis, and a summary of the Chapman Report, will be included in the joint information circular of Global Express and Challenger in connection with their respective meetings to approve the amalgamation of Challenger and Global Express.

Sponsorship

Acumen Capital Finance Partners Limited has been engaged to act as sponsor in connection with the reverse take-over by Challenger of Global Express.

Requirements to Completion of the Amalgamation

Completion of the proposed amalgamation is subject to a number of conditions, including but not limited to, Exchange acceptance and shareholder consent. The proposed amalgamation cannot close until the required shareholder consent is obtained (being the approval of shareholders of both Global Express and Challenger holding in excess of 66?% of the outstanding common shares). There can be no assurance that the proposed amalgamation will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the publicly disseminated press releases of the Company and the management information circular to be prepared in connection with the amalgamation, any information released or received with respect to the proposed amalgamation may not be accurate or complete and should not be relied upon. Trading in the securities of Global Express should be considered highly speculative at this time based on the information contained herein.

Cautionary Statements

This news release contains forward-looking information on future production, project start-ups and future capital spending. Actual results or estimated results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors or revisions. The information in this news release also includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Although the Company believes that the expectations reflected in forward-looking statements are reasonable, it can give no assurances that the expectations of any forward-looking statements will prove to be correct.

Statements contained in this news release relating to future results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such statements.

The TSX Venture Exchange has in no way passed upon the merits of the proposed amalgamation and has neither approved nor disapproved the contents of this press release.

Contact Information

  • Global Express Energy Inc.
    Mr. John Mackay
    President and Director
    (403) 619-3637
    Email: jmackay@jmackay.ca
    or
    Global Express Energy Inc.
    306, 908 - 17th Avenue SW
    Calgary, Alberta T2T 0A5
    (403) 619-3637
    (403) 234-9978 (FAX)