Petrolympic Ltd.

TSX VENTURE : PCQ


Petrolympic Ltd.

April 11, 2014 16:48 ET

Petrolympic Ltd: Independent Report by "Sproule Associates Limited" Confirms the Presence of Conventional Natural Gas in the Masse Structure

TORONTO, ONTARIO--(Marketwired - April 11, 2014) - Petrolympic Ltd. ("Petrolympic" or the "Company") (TSX VENTURE:PCQ) is pleased to announce the results of an independent resource evaluation carried out by Sproule Associates Limited ("Sproule") on a structure drilled on its joint venture property in the Lower St. Lawrence area (the "Property") located in the Appalachian Basin of Quebec. Sproule conducted its evaluation according to the Canadian Oil and Gas Evaluation Handbook reserve and resource definitions. The Company holds an interest in 431,339 hectares (1,065,839 acres) of the Property through a joint-venture with Squatex Energy and Resources Inc. ("Squatex"), the operator on the Property.

The results of this independent evaluation (as shown in Table 1 below) are based on the data gathered when drilling the Massé No.1 core hole. The results of the evaluation builds on the data released by Petrolympic in it's press release dated November 15, 2013 (filed on www.sedar.com). Paul Laroche, a geologist with Petrolympic provides the following comments: "The well revealed a reservoir hosted in the Silurian Sayabec Formation and consisting of a 10 meter-thick interval of hydrothermally dolomitized limestone with high porosity and permeability values up to 20.8% and 1624 mD, respectively (as shown in Table 2 below). Contrary to shale gas, these types of reservoirs do not require hydraulic fracturation. The analysis of the gas charge of the reservoir indicated it is composed of 89% methane and devoid from hydrogen sulfide."

Jean-Claude Caron, President of Squatex draws a comparison between the Property and St. Flavien reservoir in the St. Lawrence Lowlands - one of the only two reservoirs that have produced natural gas in economic quantities in Quebec: "The parameters reported from Massé No.1 core hole are similar to St. Flavien reservoir, which is also hosted in hydrothermally dolomitized limestone with thickness varying between 1 and 8 meters, porosity values ranging from 2.5-10% (average between 3-5%). St. Flavien reservoir has produced 5.7BCFG prior to being converted into an underground gas storage facility that is still in operation since 1998."

The results obtained by Petrolympic and Squatex in the Lower St. Lawrence are encouraging and present additional opportunities since the evaluation is focused on only one of the three hydrocarbon-bearing zones identified in the well. Furthermore, several seismic anomalies with characteristics similar to Massé No.1 core hole have also been highlighted by the proprietary seismic data within the limits of the Property. This is not included in the Sproule resource evaluation and presents significant upside to the potential of the Property, further validating the pioneering efforts of Petrolympic and Squatex in exploring the potential of the area.

Petrolympic and their partner Squatex are now designing a drilling program to validate the potential of the Massé Structure, and are preparing an exploration program to further document and test other prospective structures identified within the Property."The timing is right for demonstrating the producibility of a natural gas conventional reservoir in the Lower St. Lawrence, since economic growth in the area will be likely stimulated by the recent election of a majority government in the province, and clean energy sources will be in high demand on close local markets", says Mendel Ekstein, President and CEO of Petrolympic.

Petrolympic also owns a 100% interest in two exploration permits in the same area, referred to as the Matapedia and the Mitis properties. Several conventional plays and exploration leads have been identified in these permits where oil and gas have been encountered in mining wells in the 90's. Based on proprietary seismic data, the prospective Sayabec Formation is also believed to be present at depth in these two permits.
Table 1: Results of the resource evaluation as presented in Sproule's report.

Table S-2
Summary of Project Gross Unrisked Undiscovered Unrecoverable Gas Initially-in-Place (GIIP)
Sayabec Formation of the Massé Structure, Lower St. Lawrence Area, Québec, Canada
1,2
Estimated by Sproule Associates Limited, As of February 28, 2014
Structure Formation Gas (BCF)2,3
Low4 Best5 High6 Mean7
(P90) (P50) (P10)
Massé Sayabec 3 8 26 12
1. Undiscovered Petroleum Initially-in-place (equivalent to undiscovered resources) is the quantity of petroleum that is 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". Only the in-place volumes are presented here as a development project to recover any hydrocarbons discovered has not been defined. There is no certainty that any portion of these unrisked undiscovered GIIP will be discovered and, if discovered, there is no certainty that it will be developed or, if it is developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of these resources.
2. These are the project gross unrisked undiscovered petroleum initially in place volumes (i.e. 100% project gross) estimated for the Sayabec Formation of the Massé Structure without any adjustments for working interest and before deduction of any royalties.
3. "BCF" is billions of cubic feet, "MMboe" is millions of barrels of oil equivalent.
4. Low Estimate is considered to be a conservative estimate of the quantity that will actually be in-place. It is likely that the actual remaining quantities in-place will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually in-place will equal or exceed the low estimate.
5. Best Estimate is considered to be the best estimate of the quantity that will actually be in-place. It is equally likely that the actual remaining quantities in-place will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually in-place will equal or exceed the best estimate.
6. High Estimate is considered to be an optimistic estimate of the quantity that will actually be in-place. It is unlikely that the actual remaining quantities in-place will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually in-place will equal or exceed the high estimate.
7. Statistical aggregation is the process of probabilistically aggregating distributions that represent estimates of resource quantities at the reservoir, prospect, or portfolio level. Arithmetic summation and statistical aggregation of the means yield similar results. Arithmetic summation of the Low Estimate, Best Estimate and High Estimate are not statistically appropriate. Both the statistical and arithmetic summation of the unrisked prospects may be misleading because it assumes success for each of the prospect entities. The chance of this occurring is extremely unlikely. Actual recovery is likely to be less and may be zero.

Table 2: Core laboratory analyses from the Massé No.1 core hole, as reviewed by Sproule and used as input parameters in the resource evaluation.

SQUATEX RESSOURCE ET ENERGIE SQUATEX MASSE #1 File No. : 52131-13-0145
Field : Formation : Date : 2013-07-26
Province : QUEBEC Coring equip : Analysts : DJB
License : Coring fluid : WATER BASE MUD Core Dia : 48 mm
CORE ANALYSIS RESULTS
SAMPLE NUMBER DEPTH
m
SAMPLE LENGTH
m
PERMEABILITY (MAXIMUM)
Kair
mD
PERMEABILITY
(90 DEG)
Kair
mD
PERMEABILITY
(VERTICAL)
Kair
mD
POROSITY
(HELIUM)
fraction
BULK
DENSITY
(kg/m3)
GRAIN
DENSITY
(kg/m3)
DESCRIPTION
FD 1 1845.20 0.11 0.02 0.01 <0.01 0.037 2710 2810 dol i ppv sv mv
FD 2 1847.10 0.07 1624 1584 <0.01 0.208 2220 2800 dol i ppv sv
FD 3 1848.00 0.09 0.01 0.01 <0.01 0.013 2780 2810 dol i sv
FD 4 1856.00 0.05 0.06 0.02 0.02 0.007 2640 2660 ss vf f vfrac
FD 5 1873.50 0.04 <0.01 <0.01 <0.01 0.002 2640 2640 ss vf f
Results of five core sample analyses for the Massé # 1 well. The Company determined an average porosity estimate of 4,1% for the dolomitized zone of interest using results from Samples FD-1 (1,845.2 m; 3,7%), FD-2 (1,847.1 m; 20,8%), and FD-3 (1,848.0 m;1,3%). A porosity of 4,1% over a net pay thickness of 5 m (4,7m = ~3%; 0,3 m = 20,8%) is a mathematical average that assumes the Massé # 1 well is representative of the average petrophysical characteristics for the entire Massé Structure - which in reality is likely not the case (Estimation du Gaz en Place - Structure Massé, September 2013).

About Petrolympic Ltd.

Petrolympic Ltd. is a Canadian junior oil and gas company actively exploring for premium light crude oil and natural gas in North America. The Company is presently focused on its near-term oil production asset in the prolific Maverick Basin of Texas, USA. The Company also holds an interest in a total of 754,216 hectares (1,863,668 acres) of oil and gas exploration permits in the Appalachian Basin of Quebec that include holdings in the St. Lawrence Lowlands and Gaspe Peninsula. The Company's holdings in the St. Lawrence Lowlands consist of a 30% interest in 217,370 hectares (536,941 acres) through a joint venture with Squatex Energy and Resources Inc. ("Squatex"), a 12% interest in 8,000 hectares (19,768 acres) through the Farmout Agreement with Canbriam Energy Inc., and a 100% interest in 56,622 hectares (139,913 acres) located over the Lowlands shallow carbonates platform on the south shore of the St. Lawrence River, less than 30 kilometers southwest of Montreal. These properties represent a major position in the Utica Lorraine and Trenton-Black River Plays. Petrolympic also maintains holdings in the Gaspé and Lower St. Lawrence regions, including a 30% interest in 431,339 hectares (1,065,839 acres) through a joint venture with Squatex and a 100% interest in a block of exploration permits totalling 40,885 hectares (101,029 acres) located between Rimouski and Matane prospective for hydrothermal dolomite hosted light oil.

About Squatex Energy and Resources Inc.

Squatex Energy and Resources Inc. ("Squatex") is an oil and gas exploration company created in on April 12, 2002 under the Canada Business Corporation Act having its main office located at 7055, Boul. Taschereau, suite 500, Brossard (Québec) J4Z 1A7. Squatex is a reporting issuer only in the province of Québec. Its shares are not traded in any formally organized stock exchange market. The main objective of Squatex is, as the operator, to carry out exploration work in order to evaluate the oil and gas potential of a territory under leases covering 656,093 hectares. Squatex owns in the St. Lawrence Lowlands a 70% interest over 217,370 hectares under a joint venture agreement with Petrolympic Ltd. (TSX VENTURE:PCQ) and a 28% interest over 8,000 hectares that were farmed out to Canbriam Energy Inc. Squatex also owns a 70% interest over 431,339 hectares in the Lower St. Lawrence under its joint operation agreement with Petrolympic Ltd.

Forward-Looking Statements

This press release includes certain "forward-looking information" within the meaning of the Securities Act (Ontario), including, but not limited to, statements as to timing and extent of exploration programs and the availability of exploration results. As such, forward-looking information addresses future events and conditions and so involves inherent risks and uncertainties, as disclosed under the heading "Risk Factors" and elsewhere in Petrolympic documents filed from time to time with the Ontario Securities Commission and other regulatory authorities. Actual results could differ significantly from those currently projected as a result of, among those factors, adverse weather, regulatory changes, delays in receiving permits, accidents and delays in completing exploration activities not all of which are in the control of Petrolympic. The forward-looking information contained herein is Petrolympic's reasonable estimate today of future events and conditions, but no assurance can be given that such events or conditions will occur. The reader is cautioned not to rely on these forward-looking statements. Petrolympic disclaims any obligation to update these forward-looking statements.

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

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