Petrolia Inc.
TSX VENTURE : PEA

Petrolia Inc.

June 29, 2011 08:00 ET

Petrolia: First Resource Assessment of Macasty Shale, Anticosti Island, Quebec

RIMOUSKI, QUEBEC--(Marketwire - June 29, 2011) - Petrolia (TSX VENTURE:PEA) is pleased to announce results of an independent resource assessment of the Macasty Shale by qualified reserves evaluator Sproule Associates Limited of Calgary (Sproule). Based on data available at this time, Sproule's best estimate of the Total Petroleum Initially-In-Place is 30.9 billions barrels of oil for the Petrolia land interest holdings. The probability that the Total Petroleum Initially-In-Place exceeds 19.8 billions of barrels is 90% (low estimate) and the probability that the Total Petroleum Initially-In-Place exceeds 48.2 Bboe is 10% (high estimate). These estimates are reported as barrels of oil equivalent (Bboe).

Petrolia engaged Sproule to conduct a resource assessment of the Macasty shale across Anticosti Island where Petrolia hold interests on licenses covering more than 1.5 million acres (6000 km2). The report is preliminary, and is based on data available as at June 1, 2011.

Petrolia believe the significant positive factors relevant to the estimates are:

  • The Macasty core from the Chaloupe well drilled in 2010 contained residual oil. This well is located on the high side of the Jupiter fault, where most of the Petrolia acreage is located, and where the shale is interpreted to have been within the oil window and to be oil prone;
  • The Macasty shale is equivalent to the Utica shale of the Saint Lawrence Lowlands, which has produced oil and gas on test;
  • Core analysis indicate that the Macasty rock has similar petrophysical and geochemical characteristics to analogous fields found in the North-East US;
  • The Macasty shale is a prolific source rock which has not exceeded the oil generation window over approximately three quarters of the island (most of it located in the Petrolia land holding).

Significant negative factors relevant to the estimates are:

  • The Macasty shale has not been tested on Anticosti Island.
  • The resources are inferred to exist based on the interpretation and mapping of limited pyrolysis, petrophysical and seismic data.

Because of the limited information available, these resource estimates must be treated as scoping level estimates and used with caution. Use of these estimates outside the scope of this study is not appropriate.

The value in conducting this assessment lies purely in its use as a basis for determining whether it appears worthwhile for the Company to conduct further investigation into these resources. Petrolia is actively evaluating options regarding further exploration and determination of resource potential in order to ensure that optimal shareholder value is obtained from the ongoing programs. The Anticosti exploration program is at an early stage; further work is required to determine the potential for commercially viable resource recovery, prior to considering development.

National Instrument 51-101 disclosure requires that the resource estimates must be classified according to Canadian Oil and Gas Evaluation Handbook definitions and disclosed in the most specific category. The Total Petroleum Initially-In-Place is classified as Undiscovered Resources at this time. As a project for the evaluation of the recoverable volumes has not been defined due to the very early exploration nature of this unconventional resource they have not been classified as either recoverable or unrecoverable at this time. There is no certainty that any portion of the resources will be discovered. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources.

" From the company's prospective, the Macasty resource assessment shows the large upside potential of this shale over Pétrolia exploration licenses. Further work, in terms of drilling and pilot testing, will be necessary to converts part of the extremely large volume of Total Petroleum Initially-In-Place into discovered resources and thereafter into reserves ".

The following table shows a summary of the resource assessment.

Estimates of Total Petroleum Initially-In-Place(1) Macasty Shale, Anticosti Island, Quebec As June 1, 2011
ClassificationCompany NetLow Estimate
(P90)(3)
Bboe(6)
Best Estimate
(P50)(4)
Bboe(6)
High Estimate
(P10)(5)
Bboe(6)
Undiscovered
Petroleum Initially-
In-Place(2)
Gross19.830.948.2
Petrolia net9,114,122,0
1. Total Petroleum Initially-In-Place (PIIP) is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered
2. Undiscovered Petroleum Initially-In-Place (equivalent to Undiscovered Resources) are those quantities of petroleum that are estimated, on a given date, to be contained in accumulations yet to be discovered. The recoverable portion of undiscovered petroleum initially in place is referred to as Prospective Resources, the remainder as Unrecoverable. Undiscovered resources carry discovery risk. There is no certainty that any portion of these resources will be discovered. A recovery project cannot be defined for this volume of undiscovered petroleum initially-in-place at this time. There is no certainty that it will be commercially viable to produce any portion of the resources.
3 The probability that the quantity actually in place is equal to or greater than the estimate is 90%.
4. The probability that the quantity actually in place is equal to or greater than the estimate is 50%.
5. The probability that the quantity actually in place is equal to or greater than the estimate is 10%.
6. Bboe – Billions of barrels of oil equivalent. Oil equivalent has been used to reflect uncertainty in the type of hydrocarbons expected to be encountered across the holdings.

This press release has been reviewed by Sproule

About Pétrolia

Pétrolia is a junior oil and gas exploration company which owns interests in oil and gas licenses covering 15,000 km² (2.7 million acres), which represents about 17% of the Québec territory under lease. The leases, the majority of which are located on the Gaspé Peninsula and Anticosti Island, are considered to be very promising and represent almost 70% of the territory under lease for which there is land-based oil potential in Québec. Pétrolia has 50 million shares issued and outstanding.

Forward-looking statements

Certain statements made herein may constitute forward-looking statements. These statements relate to future events or the future economic performance of Pétrolia and carry known and unknown risks, uncertainties and other factors that may appreciably affect their results, economic performance or accomplishments when considered in light of the content or implications o statements made by Pétrolia. Actual events or results could be significantly different. Accordingly, investors should not place undue reliance on forward-looking statements. Pétrolia does not intend and undertakes no obligation to update these forward-looking statements.

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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