Nexstar Energy Ltd.
TSX VENTURE : NXE.A
TSX VENTURE : NXE.B

Nexstar Energy Ltd.

February 21, 2007 09:00 ET

Nexstar Energy Update

CALGARY, ALBERTA--(CCNMatthews - Feb. 21, 2007) - Nexstar Energy Ltd. ("Nexstar Energy" or the "Company") (TSX VENTURE:NXE.A) (TSX VENTURE:NXE.B) provides an update of its operational activities in its core areas of Alberta.

PEMBINA

Nexstar Energy and its joint venture partner recently completed the acquisition and interpretation of a nine square mile 3-D seismic program over Company-owned lands and third-party lands held under a seismic option. Two initial drilling locations have been identified from this seismic survey and surface land acquisition for these locations is underway. Subject to surface access, both of these wells are expected to be drilled prior to spring break-up. The Company will operate one well at a 60% working interest and participate in the second well for a 40% working interest. A previously suspended well at 4-19, reworked by Nexstar Energy in 2006, continues to produce at an average rate of approximately 100 barrels of oil equivalent per day. The Company has a 100% working interest in the well.

SWAN HILLS

During 2006, the Company and its 50% joint venture partner, a senior producer, completed a large airborne reconnaissance survey in the Swan Hills area of north central Alberta. This high-impact prospecting program has resulted in the identification of approximately 30 anomalous regions and the creation of 30 Areas of Mutual Interest ("AMIs") with its joint venture partner over lands encompassing approximately 650,000 gross acres. The Company has recently acquired working interests within two AMIs and has also secured access to 18 square miles of existing 3-D seismic and two farm-in and option agreements within a third AMI. Upon completing a review of the existing 3-D seismic, the drilling of a Company-operated exploratory well within the third AMI is anticipated prior to spring break-up, subject to surface access. Nexstar Energy plans to secure a joint venture participant for a portion of its 50% interest in the Swan Hills project area to assist with the purchase of Crown land and the detailed geological and geophysical evaluation of the numerous exploratory anomalies identified in this area.

BIGORAY

As previously announced, the Company drilled and cased two wells for natural gas potential at 3-22 (41% working interest) and 6-25 (51% working interest). After completion, the 3-22 well tested natural gas at rates of up to 1.2 million cubic feet per day plus associated water. Operations to reduce water inflow from the completed interval in 3-22 were not successful and the well will be suspended for consideration of completion in a shallower zone identified in the wellbore. The 6-25 well was also recently completed and tested for natural gas potential in the primary zone. The initial completion of the well resulted in low rates of natural gas and water, which suggests the possibility of formation damage. A fracture stimulation of the well is planned, subject to the results of a detailed petrophysical evaluation of the target formation. As a result of information gained at Bigoray, the Company has deferred the drilling of two additional locations in the region and will focus its immediate efforts on drilling opportunities in its other core areas.

NIPISI

In the Nipisi area, the Company has a non-operated farm-in agreement on 1,280 gross acres. The third-party operator of the project has not yet initiated field operations to drill this location this winter and as a result of the operator's uncertainty, the Company and the farmor have agreed to extend the terms of the farm-in agreement until the end of this year. Nexstar Energy had previously committed to pay 10% of the initial test well costs to earn a 10% working interest, subject to convertible gross overriding royalty, before payout and a 5.5% working interest after payout. The initial well offers multi-zone potential targeting the Banff and Gilwood formations.

NEW OPPORTUNITIES

Nexstar Energy has the flexibility to rapidly evaluate exploration and development projects in areas where management has significant knowledge. Projects that complement our core area operations take priority, such as the two drilling opportunities in Pembina adjacent to the Company's existing production base. With a strong balance sheet and no debt, Nexstar Energy also has the financial capability to pursue projects that add to its existing core areas or to create a new core area.

ABOUT NEXSTAR ENERGY

Nexstar Energy is an emerging junior oil and gas company focused on drilling multi-zone crude oil and natural gas prospects in west central Alberta, complemented by strategic acquisitions.

ADVISORY: Certain information regarding the Company including management's assessment of future plans and operations, may constitute forward-looking statements under applicable securities laws and necessarily involve risks associated with oil and gas exploration, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, imprecision of reserve estimates, environment risks, competition from other producers and ability to assess sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. The reader is cautioned that the use of the terms BOE ("barrel of oil equivalent") and BOEPD ("barrel of oil equivalent per day") may be misleading particularly when used in isolation. A BOE conversion of 6 mcf to 1 BOE may not represent a value equivalency at the wellhead.

9,200,000 Class A Shares

1,080,000 Class B Shares

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

Contact Information

  • Nexstar Energy Ltd.
    Peter A. Carwardine
    President and CEO
    (403) 263-6133 ext. 201
    (403) 263-3629 (FAX)
    or
    Nexstar Energy Ltd.
    Brian J. Spilchen
    VP Finance and CFO
    (403) 263-6133 ext. 202
    (403) 263-3629 (FAX)
    or
    Nexstar Energy Ltd.
    603 - 7 Avenue SW, Suite 525
    Calgary, Alberta T2P 2T5
    Email: info@nexstar-energy.com
    Website: www.nexstar-energy.com