PRD Energy Inc.

PRD Energy Inc.

November 01, 2011 18:36 ET

PRD Energy Awarded Petroleum Exploration and Production Licenses Covering Over 240,000 Acres Onshore Germany

CALGARY, ALBERTA--(Marketwire - Nov. 1, 2011) - PRD Energy Inc. ("PRD" or the "Company") (TSX VENTURE:PRD) is pleased to announce that it has been awarded the Volkensen Production License and the Steinhorst Exploration License covering approximately 240,000 acres in Germany. Both licenses are located onshore in the state of Lower Saxony, Germany and have been awarded to PRD Energy GmbH, a wholly-owned subsidiary of the Company. PRD expects to commence operations on both licenses in early 2012.

The Volkensen Production License covers more than 2,800 acres and includes a previously producing field which was abandoned in 1993 during a low oil price environment and prior to the advent of modern drilling and completion technology. The license was awarded for an initial period of three years and includes all rights surface to basement. It provides PRD with the opportunity to redevelop and bring this oil pool back onto production. Pursuant to the terms of the license, PRD is committed to bringing at least one well onto production within the initial three year term.

The Steinhorst Exploration License covers more than 238,000 acres and includes rights to explore several abandoned oil fields. Several producing fields are located in the license area for which PRD does not have the right to explore. The license was awarded for an initial period of five years and includes all rights surface to basement. Pursuant to the terms of the license, PRD is committed to the acquisition and processing of seismic data and to drilling two wells within the initial five year term.

PRD Energy has also applied for several other exploration and production licenses in Germany. The award of these licenses is subject to the review and approval by various municipal and state government authorities. In addition, PRD Energy continues to negotiate with the major operators in the area to pursue farm-in and acquisition opportunities.

Given the cost challenges associated with drilling activities in Europe, PRD Energy believes it has developed a strategy that materially mitigates these costs. Part of this strategy is to have a sufficiently large pool of prospects, such as abandoned oil and gas fields, in order to achieve efficiency gains through continuous operations pertaining to the redevelopment of these prospects. PRD Energy anticipates these prospects will also materially shorten the timeframe to achieve profitable production. Further, PRD Energy intends to utilize new drilling and stimulation techniques to optimize flow rates and reserves recovery, reduce costs, and reduce the environmental footprint associated with our activities. It is critical to our success to effect any operations in an environmentally sensitive and transparent manner for the benefit of all stakeholders.

PRD Energy continues to evaluate projects based on a conservative risk profile, choosing projects which allow the application of our optimization and development skills. We continue to evaluate other onshore prospects in Europe, in politically stable countries having beneficial tax and royalty structures, with low geological risk and repeatable development drilling opportunities.

PRD Energy is well capitalized with a strong cash position, which allows us to commence developing opportunities that meet our evaluation metrics.

About PRD Energy

PRD Energy Inc. is a Calgary based oil and gas company engaged in the exploration, development and acquisition of, natural gas and crude oil, principally in Europe. PRD Energy's common shares are listed on the TSX Venture Exchange with the symbol "PRD".

Forward looking information

This news release contains forward-looking information relating to commencement of operations on the license, acquisition of a large pool of prospects, achieving efficiency gains through continuous operations, shortening the time frame to achieve profitable production, and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.

Forward-looking information is based on certain factors and assumptions regarding, among other things, the impact of increasing competition; the general stability of the economic and political environments in which the Company operates or owns interests; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability to operate in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with instability of the economic and political environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, the inability to settle the definitive terms of the farmout arrangements, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.

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.

Contact Information

  • PRD Energy Inc.
    Michael Greenwood
    Chairman and Chief Executive Officer
    (403) 234-0501
    (403) 234-0511 (FAX)

    PRD Energy Inc.
    Mark Hornett
    President and Chief Operating Officer
    (403) 234-0501
    (403) 234-0511 (FAX)

    PRD Energy Inc.
    Jeff Scott
    Vice President, Finance
    (403) 234-0501
    (403) 234-0511 (FAX)