Maskal Energy Ltd.

November 14, 2008 18:23 ET

Maskal Energy Ltd. Announces Joint Venture

CALGARY, ALBERTA--(Marketwire - Nov. 14, 2008) -


Maskal Energy Ltd. (TSX VENTURE:MMK) ("Maskal" or the "Corporation") is pleased to announce that it has entered into an arm's length Joint Venture Agreement (the "JVA") dated for reference July 15, 2008 with two private companies, Duce Oil Ltd. and Martini Ventures Inc., on a 1/3, 1/3, 1/3 basis for the purpose of acquiring, exploring and developing oil and gas concessions in the Kindersley/Dodsland area of Saskatchewan, approximately 200 kilometers southwest of Saskatoon, Saskatchewan. The JV has initially obtained 10 fee simple leases covering 4,400 acres from a major oil and gas producer operating in the area. The lands are subject to a freehold royalty on production in favour of the lessor ranging from 17.5 to 19 percent. Subject to a number of conditions precedent including acceptance by the TSX Venture Exchange (the "TSXV"), financing and satisfactory operational results, the JV intends to pursue light oil targets in the Viking formation by way of drilling horizontal wells and completing same using multi-stage fracture treatments. Information on Maskal's financing of its share of the JVA costs will be set forth in a further news release. Maskal's common shares are currently suspended from trading while Maskal remediates past filings made with the Alberta Securities Commission.

Chapman Petroleum Engineering Ltd. ("Chapman"), an independent qualified reserves evaluator, has prepared a prospect report (the "Chapman Report") in respect of the Dodsland Area properties entitled "Evaluation of Prospective Resources, Dodsland Area, Saskatchewan" dated July 21, 2008 with an effective date of July 1, 2008. The Chapman Report was commissioned in order to independently determine the feasibility of the Corporation participating in the exploration and development of the subject prospect, and complies with the requirements of National Instrument 51-101 as adopted by the Canadian securities regulators. The Chapman Report concludes that, after consideration of risk, the potential of the prospect is of sufficient merit to justify the work program being proposed consisting initially of 5 horizontal wells. Anticipated capital costs, net to the Corporation and including drilling, completing and equipping costs, are estimated at $500,000 per well.

A summary of certain portions of the Chapman Report is as follows:

Summary of Prospective Resources and Economics
as of July 1, 2008
Net to Appraised Interest
Forecast Prices and Costs (CDN$)

Prospective Resources
Oil Sales Natural Gas
Gas Liquids
Description Gross Net Gross Net Gross Net
(BEFORE RISK) (MSTB) (MSTB) (MMscf) (MMscf) (Mbbls) (Mbbls)
Best Estimate 100 81 0 0 0 0
Low Estimate 67 54 0 0 0 0
High Estimate 133 108 0 0 0 0
Arithmetic Average 100 81

Arithmetic Average 30 24 0 0 0 0

Net Present Values Of Future Net Revenue
Net to Appraised Interest
Forecast Prices and Costs (CDN$)

Before Income Taxes Discounted
at (%/Year)
Description 0 10 15
(BEFORE RISK) (M$) (M$) (M$)
Best Estimate 5,954 4,526 3,990
Low Estimate 3,017 2,147 1,821
High Estimate 8,529 6,600 5,881
Arithmetic Average 5,833 4,424 3,897

Arithmetic Average 1,470 1,047 889

For the purposes of the Report, Chapman has assigned a 30% probability of achieving the arithmetic average case. Readers are cautioned that the estimated values disclosed do not represent "fair market value". In preparing the foregoing, Chapman used a current year forecast price for oil of (6 months) of US/STB of $130, and an Alberta par price of $127.5 CDN/STB based on the equivalent price for light, sweet crude landed in Edmonton, Alberta after exchange of 1.00US$/CDN$ in 2008, 0.95 US$/CDN$ in 2009 0.92US$/CDN$ in 2010 and thereafter 0.90$/CDN$ and transportation differential of $2.50 CDN/STB. Capital expenditures and operating costs have been escalated at 2.0% per year until 2023. Abandonment and restoration costs, net of salvage, have been included in the cash flows for the final event of any particular well. For clarification on this point and other matters, the foregoing should be read in conjunction with the full Chapman Report which will be available on the SEDAR website at Chapman has reviewed this press release and consented to the inclusion of the summary of the Report herein.

Chapman Engineering defines "prospective resources" as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.

There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Certain statements contained in this press release may contain words such as "could", "should", "expect", "believe", "will" and similar expressions and statements relating to matters that are not historical facts are forward-looking statements. Such forward-looking statements are subject to both known and unknown risks and uncertainties which may cause the actual results, performances or achievements of the Corporation to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the receipt of required regulatory approvals, the availability of sufficient capital, the estimated cost and availability of funding for the continued exploration and development of the Corporation's prospects, political and economic conditions, commodity prices and other factors.

Readers are cautioned that estimates of future net revenue, whether calculated without discount or using a discount rate, do not represent fair market value of reserves. Natural gas volumes have been converted to barrels ("bbl") of oil equivalent ("boe") using six thousand cubic feet ("Mcf") of natural gas equal to one boe. This conversion conforms to NI51-101. Use of the term boe may be misleading, particularly if used in isolation. A boe conversion ration of 6 Mcf to 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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

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