LNG Energy Ltd.

LNG Energy Ltd.

April 26, 2011 09:25 ET

LNG Energy Announces Significant Intervals of Gas Shows in Second Polish Well and Hiring of a Polish Country Manager

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 26, 2011) - LNG Energy Ltd. ("LNG") (TSX VENTURE:LNG) is pleased to announce that the Lebork S-1 well, on the Slupsk concession in Poland, has been successfully drilled, cased and cemented to its total depth of 3,590 meters. During drilling, numerous gas shows were recorded over 285 meters of the Lower Silurian, Ordovician and Cambrian shales. The gas shows consisted of mainly methane gas. The strongest gas shows were in the Cambrian shale, although gas shows may have been suppressed in the other shallower intervals due to the full diameter coring operations.

The well was originally drilled to 3,517 meters and had 223 meters of full diameter core recovered. At that time a comprehensive suite of openhole logs were run by Schlumberger. Upon evaluation of the logs, the well was deepened to a final depth of 3,590 meters, whereupon a 2nd suite of logs were run over the additional interval drilled; including the recovery of 113 sidewall cores. The full diameter core and sidewall cores were taken for specialized gas shale core analysis that will fully evaluate the physical parameters of the rock and will be used to calibrate the openhole logs. These analyses will provide, among other data, information on porosity, permeability, total organic carbon, rock eval pyrolysis, thermal maturity, gas composition, micropaleontology, and critical mechanical properties for completion stimulation design.

The two primary shale target intervals were thicker in the Lebork S-1 well than in the previously drilled Wytowno S-1 well. The Ordovician shale interval in the Lebork S-1 well is approximately 91 meters thick, which is slightly thicker than the 83 meters found in the Wytowno S-1 well. The Cambrian shale also thickened to 15 meters from the 9 meters found in the Wytowno S-1 well. This provides further support for the hypothesis of an increasing thickness trend that may continue into deeper portions of the basin.

The comprehensive core analysis is expected to be completed by the third quarter. The analyses of the sidewall cores from the Wytowno S-1 well are also still pending. The suite of Schlumberger openhole logs that were run in the Lebork S-1 well will be recalibrated, using the core data, to more precisely calculate the potential pay sections. The log suite in the Lebork S-1 well currently calculates the highest gas and best properties in the Cambrian shale interval followed by the overlying Ordovician shale interval. The uncalibrated log suites of both wells currently indicate higher gas calculations in the Ordovician interval in the Lebork S-1 well than in the Wytowno #1 well, but this may change after core analysis and the logs are recalibrated. During the third quarter it is anticipated that the completion will be designed and the first intervals in each well will be fracture stimulated.

The cost of the well at rig release, with casing in the ground and including the additional deepening, side wall cores and second set of logs is approximately US$5.6 million. The current estimated cost of the Lebork S-1 well, before completion, but including all future core analysis work, is US$6.5 million. Despite these added costs and due to increased efficiencies, the drilling costs are expected to be only U$0.1 million above the original drilling budget. The rig will stay on location until the end of May at which time it will begin mobilizing to the Starogard concession to begin drilling operations in mid June. The Starogard concession's wellbore will be the 5th successive gas shale well drilled by the same drilling equipment contractor and crew. LNG Energy anticipates further drilling optimization and efficiencies that will be observed in both lower costs and days on location.

Polish Country Manager

LNG has hired Patrycja Kujawa as Manager, Commercialization and Business Development in Poland, based in Warsaw.

Ms. Kujawa is a Natural Resource Economist with an MSc from the University of Alberta with a double honours degree in Economics and Political Studies from the University of Saskatchewan. Ms. Kujawa has been actively conducting economic business development and market research. She has worked with the Governments of Canada and Alberta, Leduc-Nisku Economic Development Authority, institutions of higher learning and international oilfield service companies developing expansion plans in the European market. Her recent projects involved assessing European export markets for Canadian producers, developing business opportunities for oil and gas service firms and researching commercialization options for domestic natural gas producers in Poland. Ms. Kujawa resides in Warsaw, Poland and is multi-lingual. She is a native speaker in both English and Polish, with a working command of French.

"We are excited with what we've seen with the gas shows in the second well in Poland," commented Dave Afseth, President and CEO of LNG. "We look forward to reviewing the results of the core analyses as well as the analyses of the sidewall cores that will enable us to design and implement an appropriate stimulation to flow test the wells. We welcome Patrycja to the team as we continue to build out Polish capabilities."

LNG is a Canadian exploration and development company focused on developing oil and gas reserves in Papua New Guinea, Poland and the US. LNG holds a 100% interest in approximately 5.5 million acres of prospective oil and gas properties in Papua New Guinea. LNG has a 50% net interest in approximately 360,000 gross acres of prospective shales in Poland together with Realm Energy (BVI). LNG also has a 20% net interest in approximately 734,000 gross acres of prospective shales in Poland together with BNK Petroleum Inc., Sorgenia E&P S.p.A., and Rohol-Aufsuchungs Aktiengesellschaft, and a 100% net interest in BWB Exploration, LLC ("BWB"), which holds approximately 2,800 acres of oil and gas leases in Carter County, Oklahoma (see the sale of this acreage previously announced) and an estimated 28,757 acres of leases in the Black Warrior Basin of Mississippi and Alabama. LNG shares trade on the TSX Venture Exchange under the symbol "LNG".


Dave Afseth, President & CEO

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this news release constitute "forward-looking information" as such term is used in applicable Canadian securities laws, including information LNG's current plans and expectations regarding the Wytowno S-1 and Lebork S-1 wells, including expected timing of results of core and log analyses, the hypotheses regarding the geology of the basin in which drilling is currently underway, expected timing of commencement of the planned frac programs, commencement of the first well on the Starogard concession and expectations regarding the total cost of the wells. Forward-looking information is based on plans and estimates of management at the date the information is provided and certain factors and assumptions of management. Forward looking information is subject to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results to vary materially from those projected in such forward-looking information. Factors that could cause the forward-looking information in this news release to change or to be inaccurate include, but are not limited to, the risks related to unsatisfactory results of due diligence, international operations and doing business in foreign jurisdictions, risks associated with the oil and gas industry and exploratory and development activities generally (e.g., operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, risks associated with equipment procurement and equipment failure), the risk of commodity price and foreign exchange rate fluctuations, risks related to future royalty rate changes, and risks and uncertainties associated with securing and maintaining necessary regulatory approvals, and counterparty risk related to the stability and viability of the Company's joint venture participants.

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