Kristina Capital Corp.
TSX VENTURE : KCA.P

June 20, 2008 14:48 ET

Kristina Capital Corp.: News Release

CALGARY, ALBERTA--(Marketwire - June 20, 2008) - Kristina Capital Corp Ltd. ("Kristina") (TSX VENTURE:KCA.P), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is providing additional information with respect to its previous press release issued on May 28, 2008 regarding its qualifying transaction (the "Qualifying Transaction").

Financing

The previously announced financing of common shares of Kristina ("Common Shares") to close concurrently with completion of the Qualifying Transaction with an issue price of not less than $0.50 per Common Share to raise total gross proceeds of $1,575,000 will be increased to raise total gross proceeds of $1,850,000 at an issue price of $0.50 per Common Share. The Common Shares will be issued as "flow-through" shares pursuant to the Income Tax Act. The placement will be completed by Kristina on a non-brokered basis.

Selected Resources Information - Assets

Pursuant to the Qualifying transaction, Kristina will acquire a 75% interest in three special exploratory permits for lands located in Saskatchewan (the "Assets"). The Assets consist of thee exploratory permits which expire in 2009 and 2011, covering an area of 1,187 sections of land in Saskatchewan known as the Porcupine Forest lands. Any production from the property will be subject to Crown royalties and some areas will be subject to an additional gross overriding royalty. The prospective resources with respect to the Assets have been evaluated by Chapman Petroleum Engineering ("Chapman") and a report thereon, effective as of June 1, 2008, prepared in accordance with National Instrument 51-101 and Canadian Standards set out in the Canadian Oil and Gas Evaluation Handbook (COGEH) entitled, "Evaluation of Prospective Resources - Porcupine Forest Area, Saskatchewan Prepared for Kristina Capital Corporation dated June 2, 2008" (the "Chapman Report"). "Undiscovered Resources" are those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered; the estimated potentially recoverable portion of undiscovered resources is classified as "Prospective Resources." "Prospective Resources" are those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations. There is no certainty that any portion of the resources will be discovered and that, if discovered, it may not be economically viable or technically feasible to produce any portion of the resources.

The Chapman Report assessed the prospective resources for the Favel interval in the Porcupine Forest area of eastern Saskatchewan based on an analogy to the shallow Milk River zone in the Abbey area of western Saskatchewan, which has been adjusted for the shallower depth and lower pressures in the Porcupine Forest area. The analogies relied upon in the Chapman Report indicated that the expected per well values for the Porcupine Forest area would be for ultimate recovery of 120 MMscf per well with an initial rate of 80 Mscf/d per well. Chapman prepared best, low and high estimates for the area. For the best estimate Chapman assumed 10 percent of the area (119 sections) would be developed by a total of 476 wells for a forecast of ultimate raw resources of 57,120 MMscf. In the low estimate, Chapman assumed 5 percent of the area (59 sections) would be developed by 238 wells for a forecast of ultimate raw resources of 28,560 MMscf. In the high estimate, Chapman assumed 15 percent of the area (178 sections) would be developed by 712 wells for a forecast of ultimate raw resources of 85,440 MMscf. Initial gas rates are estimated to average 80 Mscf/d per well for a total initial rate of 38,080 Mscf/d pursuant to the best estimate. Total gross development capital expenditures for the best estimate have been estimated at $121,576,000.



The Chapman Report provides the following summary regarding the 75%
interest Kristina will be acquiring:

Summary of Prospective Resources and Economics
Before Income Tax
As of June 1, 2008
Net to Appraised Interest

Cumulative Cash Flow (BIT) M$
Description Resources Discounted at:
----------------------------------------------------------------------------
Sales Gas
(MMscf) Undisc. 15%/year
------------------------------------------------
Gross Net

BEFORE RISK
Best Estimate
Shallow Gas Prospect 40,698 38,194 185,636 60,293

Low Estimate
Shallow Gas Prospect 20,349 19,097 91,540 28,919

High Estimate
Shallow Gas Prospect 60,876 57,130 278,937 91,402

Arithmetic Average
Shallow Gas Prospect 40,641 38,140 185,371 60,205

AFTER RISK
Arithmetic Average
Shallow Gas Prospect 5,283 4,958 21,874 5,602


The values provided are not necessarily the fair market values of the
resources. Additionally net present values have been based on forecast
pricing pursuant to the following forecast pricing schedule:


HISTORICAL, CONSTANT, CURRENT AND FUTURE PRICES
June 1, 2008

AECO Spot Sask.

GRP III Gas (NIT) Gas (1)
Date /MMBTU $IGJ $/MMBTU $IMMBTU
----- -------- ------ ---------- ---------
HISTORICAL PRICES GRP AECO
1994 1.82 1.73 1.78 1.88
1995 1.31 1.24 1.08 1.35
1996 1.63 1.55 1.33 1.52
1997 1.97 1.87 1.67 1.84
1998 1.94 1.84 1.94 2.05
1999 2.48 2.35 2.82 2.83
2000 4.50 4.27 5.56 4.85
2001 5.78 5.48 5.44 5.48
2002 3.86 3.66 413 4.17
2003 6.45 6.11 7.03 6.47
2004 6.25 5.92 6.60 6.50
2005 8.30 7.87 8.82 8.55
2006 6.57 6.23 6.55 6.82
2007 6.21 5.88 6.47 6.46
2008 (5 month) 7.70 est. 7,30 8.72 7.95

CONSTANT PRICES
May 30, 2008 (6) 8.90 est. 8.44 9.89 9.15

CURRENT YEAR
FORECAST 8.60 8.15 9.05 8.85
2008 (7 months)
FUTURE FORECAST
2009 8.30 7.87 8.74 8.55
2010 8.10 7.68 8.53 8.35
2011 8.00 7.58 8.42 8.25
2012 8.10 7.68 8.53 8.35
2013 8.25 7.82 8.68 8.50
2014 8.40 7.96 8.84 8.65
2015 8.57 8.12 9.02 8.82
2016 8.74 8.28 9.20 8.99
2017 8.91 8.45 9.38 9.16
2018 9.09 8.62 9.57 9.34
2019 9.27 8.79 9.76 9.52
2020 9.46 8.97 9.96 9.71
2021 9.65 9.15 10.16 9.90
2022 9.84 9.33 10.36 10.09
2023 10.04 9.52 10.57 10.29




D.C. Pentanes NGL
Gas (3) Propane (4) Butane (4) Plus (4) Mix (5)
Date $/MMBTU $IBBL $/BBL $/BBL $IBBL
----- --------- ----------- ------------ --------- ---------
HISTORICAL PRICES

1994 1.81 12.72 13.44 21.67 15.62
1995 1.29 14.38 13.97 24.11 17.18
1996 1.50 22.95 17.19 30.05 23.35
1997 1.80 17.73 19.07 30.90 22.08
1998 1.94 11.13 12.06 21.86 14.63
1999 2.51 15.93 18.01 27.73 20.09
2000 4.00 31.38 35.01 46.35 36.96
2001 6.12 31.27 30.27 44.98 35,08
2002 3.85 19.14 25.11 40.72 27.41
2003 6.45 28.85 32.15 44.23 34.46
2004 6,25 31.95 38.40 54.06 40.52
2005 8.30 38.03 46.31 69.32 49.90
2006 6.57 3897 50.42 7608 53.54
2007 6.21 40.47 49.76 75.96 53.90
2008 (5 month) 7.70 49.41 65.64 107.40 71.67

CONSTANT PRICES
May 30, 2008 (6) 8.90 54.15 67.30 123.85 79.00

CURRENT YEAR
FORECAST 8.60 52.65 67.28 100.43 71.37
2008 (7 months)
FUTURE FORECAST
2009 8.30 51.51 65.82 98.26 69.83
2010 8.10 51.48 65.78 98.19 69.78
2011 8.00 49.65 63.44 94.70 67.30
2012 8.10 49.65 63.44 94.70 67.30
2013 8.25 49.65 63.44 94.70 67.30
2014 8.40 49.65 63.44 94.70 67.30
2015 8.57 50.67 64.75 96.65 68.69
2016 8.74 51.71 66.07 98.63 70.10
2017 8.91 52.77 67.43 100.66 71.53
2018 9.09 53.85 68.81 102.72 73.00
2019 9.27 54.96 70.22 104.83 74.50
2020 9.46 56.08 71.66 106.98 76.03
2021 9.65 57.23 73.13 109.17 77.58
2022 9.84 58.40 74.63 111.40 79.17
2023 10.04 59.60 76.16 113.68 80.79

Notes:

(1) Gas Reference Price (GRP) represents the average of all system and
direct (spot and firm) sales.
(2) Price paid at field delivery point.
(3) Price paid by CanWest net of raw gas gathering and processing charges
but before deduction of field gathering and compression charges.
(4) Reference point is FOB Edmonton for fractionated product.
(5) Natural Gas Liquids blended mix price assuming typical liquid
composition of 40% propane, 30% butane and 30% pentanes plus.
(6) May 30, 2008 is the last trading day of May 2008.
(7) Capital expenditures and operating costs are escalated at 2.0% per
year until 2023.


Upon completion of the Qualifying Transaction, Kristina intends to drill ten exploratory wells during the summer of 2008 at a cost of $250,000 per exploratory well and pay $75,926 in annual rental payments for the Assets for a total cost of $2,575,926.

Deposit

Kristina has paid a refundable deposit of $25,000 to Midway to preserve the Assets which deposit is over and above the purchase price to be paid for the Assets. If required, Kristina may pay an additional deposit of $150,000 which will be applied towards the purchase price for the Assets. Payment of this additional deposit is subject to prior Exchange approval.

Trading Halt

Trading of the Common Shares on the Exchange are currently halted at Kristina's request and will remain so until the required documentation can be provided to the Exchange.

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange approval. There can be no assurances that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Kristina Energy Ltd. should be considered highly speculative.

ADVISORY: Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. Forward-looking statements in this press release include, but are not limited to, statements with respect to the closing or completion of the Qualifying Transaction. Forwardlooking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production, marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this news release are made as of the date of this news release, and Kristina does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

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

Contact Information

  • Kristina Capital Corp Ltd.
    Murray K. Atkins
    Chief Executive Officer
    (403) 244-3555
    or
    Kristina Capital Corp Ltd.
    Gordon D. Anderson
    Chief Financial Officer
    (403) 265-3733 ex 235