Lions Gate Energy Inc.

April 11, 2006 11:17 ET

Lions Gate Energy Inc.: Participation Agreement-Virgo Zama

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 11, 2006) - The Board of Directors of Lions Gate Energy Inc. (the "Company") (TSX VENTURE:LG) is pleased to announce that it has, subject to TSX Venture Exchange approval, entered into a participation agreement with Warburg Resources Inc. ("Warburg") whereby the Company has been granted a 12.5% before payout interest and an 8.125% after payout interest in a property in northern Alberta in the Virgo Zama Basin, subject to Crown and farmor royalties ranging from 5% to 15%. The participation cost for these interests is $156,000 (being 12.5% of the estimated costs).

One well at the project has been successfully drilled and put on production. The 13-22 well was re-entered and successfully completed in the Keg River formation. A production battery with the design capability of 2000 b/d of fluid has been constructed at the well. Based on information provided by Warburg Resources Inc. (the operator), production which commenced on January 17, 2006 has flowed as follows:

January - Hours on 217
Gross Production: 281.6 m3 of Oil (1771.3 Barrels)
Net Production to Lions Gate Energy 35.2 m3 of Oil (221.4 Barrels)

February - Hours on 407
Gross Production: 353.0 m3 of Oil (2220.4 Barrels)
Net Production to Lions Gate Energy 44.1 m3 of oil (277.5 Barrels)

Gross Cumulative Production to-date: 634.6 m3 of Oil (3991.6 Barrels)
Net Cumulative Production to-date
to Lions Gate Energy 79.3 m3 of Oil (498.9 Barrels)

The Virgo Zama area has been a prolific producer of oil and gas from Devonian Keg River reefs. The prospect is defined by 3D seismic and all proposed wells offset former producers in existing pools.

On Behalf of the Board of Directors

J. Frank Callaghan, President and CEO

This News Release contains forward-looking statements regarding the timing and content of upcoming programs. Actual results may differ materially from those currently anticipated in such statements.

The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Lions Gate Energy Inc.
    J. Frank Callaghan
    President and CEO
    (604) 669-6463 or Toll Free: 1-800-663-9688
    (604) 669-3041 (FAX)