LNG Energy Ltd.
TSX VENTURE : LNG

LNG Energy Ltd.

January 10, 2011 08:00 ET

LNG Energy Announces Spudding of Polish Well

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 10, 2011) - LNG Energy Ltd. ("LNG" or the "Company") (TSX VENTURE:LNG) is pleased to announce that its 20% owned Polish subsidiary, Saponis Investments Sp. Z o.o. ("Saponis"), has spudded its 1st shale gas exploration well, Wytowno S-1, in Poland. As of Sunday, January 9, 2011, intermediate casing has been landed at 1205 mKB, and cemented in place, with drilling operations about to resume towards the Ordovician/Silurian primary objective.

The Wytowno well is the 1st exploration well that will be drilled to meet investment commitments for Saponis' three concession areas; Slawno, Slupsk and Starogard. The Wytowno S-1 wellbore is located within the Slawno concession area (refer to the recently updated corporate presentation located on the LNG Energy Ltd. website (http://www.lngenergyltd.com/s/Presentations.asp) for a map identifying the location of the Wytowno S-1 wellbore). 

Saponis is using the same drilling contractor crews and equipment that drilled both ConocoPhillips/Lane Energy wells, with the 1st well being located less than 60 kilometres (37 miles) from LNG's Wytowno S-1 wellbore. The primary target objective for all wells has been the Ordovician/Silurian Shales within the Baltic Basin. The Wytowno S-1 well, with a TVD of 3315 m, is anticipated to be drilled within 45 days, with an AFE cost of US$10MM to drill, case, hydraulic fracture complete and test the Ordovician/Silurian gas shale formation deliverability. The Wytowno well is also located close to the existing Polish natural gas distribution pipeline system. This proximity to the local pipeline distribution grid should provide rapid and relatively inexpensive access to the lucrative Polish gas market, where the 2010 natural gas prices have recently averaged approximately $9.00 per thousand cubic feet (Mscf).

"The spudding of the first well is an important milestone for our Company in exploring the large natural gas potential for Poland where natural gas markets and prices remain robust. We look forward to Saponis successfully completing this well and drilling two more wells on Saponis' other two concessions in Poland in 2011," commented Dave Afseth, President & CEO of LNG.

About LNG Energy Ltd.

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 also has a 20% net interest in approximately 734,000 gross acres of a shale gas exploration project 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 2,235 acres of oil and gas leases in Carter County, Oklahoma and an estimated 21,412 acres of leases in the Black Warrior Basin of Mississippi and Alabama. LNG shares trade on the TSX Venture Exchange under the symbol "LNG".

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 regarding the expected timing and cost to complete drilling, casing, hydraulic fracturing and testing of the Wytowno S-1 well and the other two wells in the Saponis concession areas, and gas prices in Europe. 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, including that estimates as to timing and cost to complete drilling of the Wytowno S-1 well provided to management by Saponis and that the capital, equipment and approvals required to conduct the proposed work will be available when required. 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 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.

LNG ENERGY LTD.

Dave Afseth, President & CEO

Shares Outstanding: 257,444,365

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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