Kroes Energy Inc.
TSX VENTURE : KRS

Kroes Energy Inc.

March 11, 2008 13:05 ET

Kroes Energy Inc. Resumes Trading

CALGARY, ALBERTA--(Marketwire - March 11, 2008) - Kroes Energy Inc. ("Kroes" or "the Company"), (TSX VENTURE:KRS) is pleased to announce that its shares have resumed trading pursuant to the TSX Venture Exchange accepting the submission of a geological report by Vecta Energy Corp. ("Vecta") and filing of Personal Information Forms by the new and continuing directors of the Company.

As previously announced, Kroes and Vecta will merge, as equals, all of their businesses and operations. The merger will be accomplished by Kroes making a take-over bid for all of the issued and outstanding shares of Vecta. It is expected that the transaction will be a "Fundamental Acquisition" pursuant to TSX Venture Exchange ("the Exchange") Policy 5.3.

Kroes is a junior oil & gas company with non-operated production of approximately 100 barrels of oil equivalent ("BOE") per day from its shallow gas interests in central Alberta. Vecta is a private oil & gas exploration company that began operations in Alberta in 2005 with financial and technical support from Vecta Oil & Gas Ltd. ("Vecta Oil") of Dallas Texas, a company that developed sophisticated shear wave seismic technology that enhances the ability to evaluate prospective exploratory lands. This advanced technology has been applied in the evaluation of the lands acquired by Vecta in western Canada and Vecta Oil will continue to provide high-end geological and geophysical expertise to the combined company.

Vecta has acquired approximately 5,000 net acres of prospective lands in the Brewster and Gilby regions of west central Alberta; has participated in four wells; and has licensed the "Shear Wave" technology in the Western Canadian Sedimentary Basin. At this point, Vecta does not have any reserves as defined under NI 51-101.

In the Brewster area, Vecta has assembled interests in 16 gross sections of land with an average working interest of 14 percent, or 2,600 net acres. The prospects in the Brewster area are primarily for Belly River, Nordegg, Rock Creek and Manneville objectives. Vecta is participating in a direct offset to a Belly River well that was drilled by a leading North American oil and gas producer and is now producing almost 4 million cubic feet of gas per day (per production volumes reported by the operator for the most recent reporting period.) The Crew Brewster 15-11-43-13 W5M well was spudded on March 1, 2008 and has reached total depth of 2285 meters awaiting completion.. The estimated cost to Vecta to drill and case this well is approximately $140,000.00. Completion costs for the well will be additional, and have not yet been estimated. Vecta has a 13.125% working interest in this well.

In this same region Vecta has assembled an additional 5 gross sections of land with an average working interest of 38 per cent, or 1,200 net acres. In 2007 Vecta participated in drilling one successful well to the Elkton formation at 12-15-42-13-W5. Vecta holds a 47.5% working interest in the well and expects that its share of completion costs for the 12-15 well will be approximately $500,000.

In the Gilby area Vecta has assembled 4 gross sections of land with an average working interest of 45 per cent, or 1,150 net acres. The prospect at Gilby is primarily from the Lower Manneville stratigraphic sands. The target depth of the Lower Manneville ranges from 2000 to 2500 meters and has a pay interval of approximately 150 meters. Vecta expects the Lower Manneville to produce natural gas with some associated liquids. Vecta is anticipating farming out its interest in this area and anticipates retaining an after payout interest so therefore does not expect to incur any costs initially.

The merger will result in the new Board of Kroes to be made up of four Directors nominated by Kroes and four Directors nominated by Vecta. Mssrs Tom Coffman and Charles ("Chuck") Selby will be nominated to the Board by Vecta, with the remaining two nominees to be identified at a later date. Kroes has advised that Fred Callaway, Darrell Zakreski, James Cummings and Stewart Gossen will be its nominees. The February 11, 2008 news release published by the Company contained brief bios for Mssrs Coffman, Selby, Callaway and Gossen. Mr. Zakreski is a Victoria-based businessman involved in oil & gas and real estate development. Mr. Cummings is a prominent Calgary lawyer and partner in the law firm International Energy Counsel LLP. Mr. Cummings has served in senior management positions for a variety of Canadian oil & gas companies and is a member of the board of directors for several public and private companies.

Fred Callaway, President of Kroes, said "We feel that Kroes needs to expand and diversify its asset base, and the merger with Vecta will accomplish both objectives. Kroes is focused on low-risk shallow gas development whereas Vecta's assets are concentrated in lands where successful results could have a major impact on the Company's future growth. In addition, Vecta's access to state of the art seismic technology will give Kroes a competitive advantage over its peer group." Tom Coffman, Chairman of Vecta, said "We believe that our two companies together have operational synergies, and that Kroes is the right partner with which to further develop the assets that Vecta has assembled."

Vecta is currently preparing audited financial statements for 2005, 2006 and 2007. There will be a further announcement once those statements have been released. Meanwhile, Kroes and Vecta are preparing a Bid Circular and a Director's Circular, which will contain full information about each company, for their respective shareholders and which they expect to mail by the end of April.

Following completion of this transaction Kroes will continue as a junior oil and gas company listed on the TSX Venture Exchange.

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6MCF:1Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

FORWARD-LOOKING STATEMENTS

This disclosure contains certain forward-looking estimates that involve substantial known and unknown risks and uncertainties, certain of which are beyond Kroes' control, including: the impact of general economic conditions in the areas in which the Company operates, industry conditions, changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in commodity prices, foreign exchange or interest rates, stock market volatility and obtaining required approvals of regulatory authorities. In addition, there are risks and uncertainties associated with oil and gas operations; therefore, Kroes' actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking estimates and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking estimates will transpire or occur, or if any of them do so, what benefits, including the amounts of proceeds, that Kroes will derive from that.

To receive company news releases via e-mail, please advise admin@kroesenergy.com and specify "Kroes Press Releases" in the subject line.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information