Orion Oil & Gas Corporation
TSX : OIP

December 01, 2010 16:05 ET

Orion Extends Viking Light Oil Play in Redwater

CALGARY, ALBERTA--(Marketwire - Dec. 1, 2010) - Orion Oil & Gas Corporation ("Orion" or the "Company") (TSX:OIP) announces the acquisition of 4.4 additional sections of land (2,821 acres) and Viking light (32 degrees API) oil production immediately adjoining the Company's Redwater light oil production operations. The Company is paying C$6.6 million for the property which currently produces approximately 165 boe/d and had independently audited reserves ending December 31, 2009 of 260.0 thousand boe ("mboe") proved developed producing and 370.5 mboe proved plus probable. As the acquired lands and production are adjacent to Orion's Redwater operations, Orion will be able to immediately focus on optimization.

The property is currently developed with vertical and directional wells. The Company's recent success in the Redwater area include a Viking short horizontal well stimulated with a multi-stage fracture treatment with an initial production rate of approximately 100 boe/d. The acquired lands lie within a well defined Viking development fairway. The medium and longer term focus of the new property will be re-development with horizontal wells, multi-stage fracture stimulation, and other enhanced recovery opportunities to increase the ultimate oil recovery from the field. All contemplated operations and activities will be funded from internal cash flow and existing bank lines.

Summary Information Relating to Orion

Orion is engaged in the exploration for, and development of, oil and natural gas interests located primarily in the Kaybob, Redwater and Bigstone areas of Alberta. Orion's current production is 5,800 boe/d, which is comprised of approximately 51% light oil and natural gas liquids and 49% natural gas. Orion is the operator at its Kaybob, Redwater and Bigstone properties and has sufficient capital to fully fund the development of its properties.

MEANING OF BOE: When used in this press release, boe means a barrel of oil equivalent on the basis of 1 boe to 6 thousand cubic feet of natural gas. Boe/d means a barrel of oil equivalent per day. Boe's may be misleading, particularly if used in isolation. A boe conversion ratio of 1 boe for 6 thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Cautionary Statements

This press release contains forward looking statements. More particularly, this press release contains statements concerning Orion's production rates and future development plans. Although Orion believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Orion can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Orion's Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this document are made as of the date hereof and Orion undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • Orion Oil & Gas Corporation
    Gary Guidry
    President and Chief Executive Officer
    (403) 297-1430
    (403) 237-9791 (FAX)
    or
    Orion Oil & Gas Corporation
    Douglas Allen
    Chief Financial Officer
    (403) 297-1430
    (403) 237-9791 (FAX)
    or
    Orion Oil & Gas Corporation
    Trevor Peters
    Vice President, Business Development and Corporate Planning
    (403) 297-1430
    (403) 237-9791 (FAX)
    or
    Orion Oil & Gas Corporation
    Dean Tucker
    Chief Operating Officer
    (403) 297-1430
    (403) 237-9791 (FAX)
    www.orionoilandgas.ca