Pilot Energy Ltd.

Pilot Energy Ltd.

February 01, 2006 07:00 ET

Pilot Energy Ltd. Announces Property Acquisition

CALGARY, ALBERTA--(CCNMatthews - Feb. 1, 2006) - Pilot Energy Ltd. ("Pilot") (TSX VENTURE:PGY) is pleased to announce that it has closed its previously announced arm's length acquisition of all the issued and outstanding shares a private Alberta-based oil and gas company for a total consideration of $800,000. The consideration for the acquisition was satisfied by the payment by Pilot of $650,000 in cash and the issuance of 100,000 common shares of Pilot at a deemed price of $1.50 per common share. The TSX Venture Exchange (the "Exchange") approved this acquisition as an expedited acquisition pursuant to the Exchange Policy 5.3. The cash portion of the consideration was funded from Pilot's existing bank credit facilities.

The oil and gas assets and interests of the private company are all located in the Chauvin area of Alberta and are currently producing approximately 45 barrels of oil per day of 100 percent operated production. This addition increases Pilot's production in it's Chauvin core area to approximately 235 barrels of oil equivalent per day ("boepd").

Pilot is focused on quarter over quarter growth through acquisitions, development drilling, optimization and lower risk exploration. Production in the fourth quarter ending December 31, 2005 averaged approximately 700 boepd, a 15 percent increase over third quarter 2005 average production of 611 boepd. Average production for the month of December, 2005 was approximately 800 boepd.

After closing this acquisition Pilot expects to average 825 boepd of production for the first quarter of 2006 and will continue to strive to achieve its goal of quarterly growth throughout 2006.

Pilot is a Canadian junior energy company engaged in the exploration and development of oil and natural gas in Alberta and Saskatchewan.

Certain statements in this press release are forward-looking statements. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by Pilot at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors, many of which are beyond the control of Pilot. There is no representation by Pilot that actual results achieved during the forecast period will be the same, in whole or in part, as forecast.

Issued and Outstanding Common Shares: 19,670,212

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

Contact Information

  • Pilot Energy Ltd.
    Todd Lemieux
    (403) 514-8115 ext. 226
    Pilot Energy Ltd.
    Doug Smith
    Chief Financial Officer
    (403) 514-8115 ext. 232