Marksmen Resources Ltd.

Marksmen Resources Ltd.

July 07, 2008 17:32 ET

Marksmen Updates Reserves Information and 2008 Drilling Program

CALGARY, ALBERTA--(Marketwire - July 7, 2008) - Marksmen Resources Ltd. ("Marksmen" or the "Company") (TSX VENTURE:MA) is pleased to announce the summary results of its June 1st, 2008 reserve report, (the "Report") prepared by Reliance Engineering Group Ltd. dated July 4, 2008, and also outlines the Company's drilling program for this year on its Penhold property.

The properties evaluated in the Report are located in Alberta and Saskatchewan. The Report was prepared for the purpose of updating the Company's December 31st, 2007 year end report to take into account the sale of certain producing properties, the addition of new reserves and incorporating current pricing forecasts. The Company's Petroleum and Natural Gas Reserves were evaluated according to the Canadian Oil and Gas Evaluation Handbook (COGEH) with reserve definitions consistent with National Instrument 51-101 Standards of Disclosure for Oil & Gas Activities.

The Company is pleased to report the summary highlights of the Report.


A summary of the estimated reserves by category as at June 1, 2008 is set out in the table below.

Summary of Oil and Gas Reserves
Forecast Prices and Costs
Oil and Condensate Natural Gas Natural Gas BOE
Reserve Category Gross(a) Net(b) Gross Net Gross Net Gross
Mbbl Mbbl Mbbl Mbbl Mmcf Mmcf
Proved Producing 19.5 18.5 2.5 2.2 871 805
Proved Developed
Non-producing - - 2.8 1.6 432 369
Proved Undeveloped - - - - - -
Total Proved 19.5 18.5 5.3 3.8 1,303 1,174 242,000

Probable 30.1 25.9 16.0 9.9 2,315 1,908 431,900

Total Proved Plus Probable 49.6 44.4 21.3 13.7 3,618 3,082 673,900

(a)Gross refers to Company working interest reserves
(b)Net refers to Company net revenue interest (after royalty) reserves

References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

After the sale of certain oil and gas properties but offset by new reserves, proved reserves were down only slightly from 245,700 BOE to 242,000 BOE or 1.5%. Probable reserves increased by 1.7% to 431,900 BOE from 424,900 BOE. The net present value (NPV 10%) of the proved plus probable reserves increased 31.5% from $8.75 million to $11.5 million at June 1, 2008.

The following table summarizes the net present value of future net revenues as at June 1, 2008.

Net Present Values of Future Net Revenues(c)
Forecast Prices and Costs

Before Income Taxes
At 0% At 5% At 10% At 15%
Reserve Category $000 $000 $000 $000
Proved Producing 4,970 4,408 3,965 3,612
Proved Developed Non Producing 1,829 1,503 1,258 1,070
Proved Undeveloped - - - -
Total Proved 6,799 5,911 5,223 4,682
Probable 10,270 7,908 6,273 5,087
Grand Total 17,069 13,819 11,496 9,769

(c) The estimated future net revenues and net present values represent
estimated values based on the Report and Reliance's pricing forecast but
do not necessarily represent fair market value.

Summary of Pricing Assumptions
Plant Gate
EXCHANGE WTI (1) Canadian Crude SPOT(3) NGL Mix
YEAR (%) $US/$CDN $US/BBL ($CDN/BB)(2) $/Mcf $/BBL
2008 7mo. 2.0 1.0 119.69 118.28 10.63 121.13
2009 2.0 1.0 116.35 114.92 9.89 117.69
2010 2.0 1.0 114.09 112.63 9.11 115.35
2011 2.0 1.0 96.80 95.32 8.42 97.62
2012 2.0 1.0 86.59 85.09 8.15 87.13
2013(4) 2.0 1.0 88.33 86.80 8.33 88.90

Note: (1) West Texas Intermediate-Cushing Oklahoma.
(2) 40 degree API and 0.5% sulphur adjusted for gravity and
(3) Alberta Spot Price adjusted for heating value and aggregator
control price
(4) Prices escalated at 2.0% per year throughout

The June 1st,2008, Report incorporates the sale of the Nottingham oil producing property effective January 1st, 2008, the addition of proven developed non-producing reserves at Penhold, five months of production and new commodity price forecasts effective May 31st, 2008.

On June 27th, Marksmen announced the successful closing of a $3,800,000 financing made up of a $3,400,000 loan facility and a private placement in the form of common shares issued on a "flow-through share" basis for total gross proceeds of $400,000. Approximately, $2,200,000 was used to pay off the Company's previous credit line with the remaining funds earmarked for a four well development drilling program on Marksmen's Penhold lands.

The Company is currently doing the ground work for the four well development drilling program which is expected to start in the second half of August. Plans call for the drilling of a Horseshoe Canyon CBM (coalbed methane) control well and two commingled Edmonton Sand/ Horseshoe Canyon wells and one Edmonton Sand well.

By drilling the CBM well, the Company intends to re-enter four producing Edmonton Sand wells and complete the Horseshoe Canyon Coals thus potentially increasing production and reserves for a small incremental cost. In addition, up to 10 new drilling locations can now be co-mingled Edmonton Sand and the Horseshoe Canyon Coals, thereby potentially increasing production and extending reserve life.

Co-mingling of conventional Edmonton sand and Horseshoe Canyon CBM is a natural extension to Marksmen's shallow gas strategy. As both zones produce dry, low pressure pipeline quality gas the existing gathering and surface facilities are an excellent fit and require no reworking. The resource potential of the Horseshoe Canyon coals at Penhold has the potential to add significantly to the Company's reserves.

On behalf of the Board of Directors

Peter Malenica, President & CEO

Forward-Looking Statements

This news release may contain "forward-looking information" within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein may be forward-looking information. Generally, forward-looking information may be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "proposed", "is expected", "budgets", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases, or by the use of words or phrases which state that certain actions, events or results may, could, would, or might occur or be achieved. This forward-looking information reflects Marksmen's current beliefs and is based on information currently available to Marksmen and on assumptions Marksmen believes are reasonable. These assumptions include, but are not limited to, the actual results of drilling and exploration being equivalent to or better than anticipated or historical results and future costs and expenses being based on historical costs and expenses, adjusted for inflation. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Marksmen to be materially different from those expressed or implied by such forward-looking information. Such risks and other factors may include, but are not limited to: the early stage development of Marksmen and its projects; general business, economic, competitive, political and social uncertainties; commodity prices; the actual results of current exploration and development or operational activities; competition; changes in project parameters as plans continue to be refined; accidents and other risks inherent in the natural resources industry; lack of insurance; delay or failure to receive board or regulatory approvals; changes in legislation, including environmental legislation, affecting Marksmen; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; and lack of qualified, skilled labour or loss of key individuals. Although Marksmen has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. Marksmen does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

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

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