Paradigm Oil & Gas Inc.
OTC Bulletin Board : POGI

Paradigm Oil & Gas Inc.

July 05, 2005 14:30 ET

Paradigm Oil & Gas Inc, is Pleased to Announce the Operators of the Sawn Lake Heavy Oil Project Expect to Drill in July 2005

CALGARY, ALBERTA--(CCNMatthews - July 5, 2005) - The Board of Directors of Paradigm Oil & Gas, Inc. ("Paradigm" or "the Company") (OTCBB:POGI), is pleased to announce that drilling on the Sawn Lake heavy oil project in northern Alberta is set to commence in July 2005.



- A recent conference call hosted by the operators of the Sawn Lake
heavy oil project targeted drilling to commence in July 2005
- Paradigm has been served with AFE's by the operator for the
drilling and completion of a horizontal well and the drilling of a
vertical well
- The first well will be drilled at the SE 1/4 of section 36 TWSP 91,
Range 12 W5M
- This well will be drilled vertically to allow coring and logging
in the oil sands of the blue sky formation
- The operator has approved budget to drill 15 new horizontal wells
in the next 12 months
- A recent Rider Scott report estimates a bitumen resource in place
of over 800,000 MSTB utilizing volumetric calculations
- The type of oil sands that is expected from the Sawn Lake project
are insitu, which allows for cold production using pumping and
drilling techniques
- The oil sample taken from the project shows a 9.61 degrees API with
a live oil viscosity of 17300 centipoise.

ABOUT HEAVY OIL IN ALBERTA
- Alberta has huge deposits of oil sands that underlie 140,800 square
kilometers (54,363 square miles) of the province. These deposits
are separated into three regions: Peace River, Athabasca (Fort
McMurray area), and Cold Lake (north of Lloydminster).(1)
- According to the Alberta Energy & Utilities Board(2), 829,000
barrels per day of bitumen production occurred in 2002. Of this
total, over sixty percent was upgraded to produce 435,000 barrels
per day of synthetic crude oil and distillates, and 305,000 barrels
per day was sold as bitumen. Oil sands production currently
represents 35% of Canada's total crude output. By 2005,
marketable sales of synthetic crude oil and bitumen are expected to
account for 50% of Canadian crude oil output and 10% of North
America's output.
- More than half of Canada's total oil production is currently
classified as heavy oil. Conventional oil production is projected
to decline while heavy oil production is expected to more than
double from the current level of over 1.0 million barrels per day
within 10 years. Capital expenditures in Alberta's heavy oil
industry are anticipated to exceed $60 billion in the period
between 2003 and 2012.

THE SAWN LAKE PROJECT

- The Sawn Lake project located in the Peace River region includes
over 63 sections of land.
- An independent resource evaluation carried out by Ryder Scott
Company estimates 820 million barrels of oil in place for the Sawn
Lake Project. This report can be found at www.deepwelloil.com.

- The Sawn Lake project has similar geological characteristics to the
existing Seal Field project producing heavy oil from the same
Bluesky reservoir formation. The primary production without any
enhanced recovery is 2,500 barrels per day for the first nine
months ended September 30, 2004.(3) Average primary well
productivity is 400-500 barrels per day.

- Other operators targeting the deeper Slave Point Formation have
previously drilled much of the land. Because of the earlier
extensive exploration for deeper light oil, Sawn Lake project is
able to benefit from data collected by others pertaining to the
drilling of 67 wells that penetrated and partially delineated the
Bluesky Formation heavy oil reservoir.
- Anticipated Sawn Lake operations
- The initial development step is scheduled to commence during the
summer of 2005. The early focus of the drilling program is to
define the heavy oil reservoir one section at a time and attempt to
initiate production from each drilled location as soon as practical
in order to generate an early positive cash flow.

- Upon the successful testing of each drilled section, the operator
will prepare and file applications with the Alberta Department of
Energy for full-scale development. The section-by-section test
period is to be followed by a comprehensive production-drilling
program. Full production will be coordinated with the start-up of
the field enhancement facility to minimize dependence upon
trucking.
- The most significant factor in the potential profitability of field
enhancement will be the physical location of facilities. The Sawn
Lake Heavy Oil Project is advantageously situated since the
property is in very close proximity to both oil and gas pipelines.
Furthermore, both of these existing pipelines have a significant
excess capacity that may become available to the Company.
- Paradigm has acquired a 10% farm in opportunity on these initial
wells
- Paradigm has an option to negotiate further farm in interests as
the project moves forward


This press release contains forward-looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Actual results could differ materially from those projected in the Company's proposed oil and gas related business. The Company's business is subject to various risks, which are discussed in the Company's filings with the Securities and Exchange Commission ("SEC"). The Company's filings may be accessed at the SEC's Edgar system at www.sec.gov.

Contact Information

  • Paradigm Oil & Gas Inc.
    Robert L. Pek
    President
    (403) 827-1208
    Email: rpek@paradigmoilandgas.com
    or
    Paradigm Oil & Gas Inc.
    35 - 12880 Railway Avenue,
    Richmond, B.C.
    V7E 6G4