Rally Energy Corp.

Rally Energy Corp.

March 09, 2005 08:00 ET

Rally Energy Corp. Announces a Major Gas Discovery in Pakistan


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: RALLY ENERGY CORP.

TSX VENTURE SYMBOL: RAL
FRANKFURT SYMBOL: RLE

MARCH 9, 2005 - 08:00 ET

Rally Energy Corp. Announces a Major Gas Discovery in
Pakistan

CALGARY, ALBERTA--(CCNMatthews - March 9, 2005) - Rally Energy Corp.
(TSX VENTURE:RAL) (FWB:RLE)

Safed Koh Block, Pakistan (22.5% Working Interest)

Rodho No.3 Well

Rally Energy is pleased to announce that initial testing of the Rodho
No.3 re-entry well in the Safed Koh Block has established the presence
of natural gas accumulations in the Cretaceous Lower Goru Sandstones. A
"Notice of Discovery" was sent to the Director General, Petroleum
Concessions, Pakistan, on March 8, 2005. This Notice outlined the
details of the discovery and included the following statement: "The
commercial flow of hydrocarbons from the Lower Goru formation in Rodho-3
well is significant, as it has for the first time confirmed the presence
of hydrocarbons in the deeper horizons of the Safed Koh Range, located
in the Middle Indus Basin of Pakistan."

The Rodho No. 3 well, drilled to a target depth of 2,758 meters, was
tested through two cased-hole drill stem tests over four prospective
gas-bearing sandstone intervals. These tests measured a flow rate of 5.0
mmcf/d with 22 bbls/d of 43 degree API condensate through a one inch
choke. No water was produced. Tested gas had a gross heating value of
1,027 BTU per mcf. Analysis of the test information indicates
significant formation damage, thus stimulation through fracing should
result in a material increase in tested flow rates. Assessment work will
continue over the next few weeks for field appraisal and preliminary
development plans. No material expenditures are expected to be incurred
by Rally Energy in connection with Rodho No. 3 drilling, completion and
testing activities since the Corporation is carried for its 22.5%
working interest on the first US$1.6 million of expenditures on this
well.

The gas bearing structure being tested through the Rodho Well No.3 has
extensive aerial extent, estimated at approximately 14 square
kilometres, with a maximum vertical closure of over 450 meters. Based on
the lowest log indication, the well has proven a gross structural gas
column of 170 meters. Management believes this is a very significant
natural gas reservoir with the potential to add substantial reserves and
production. Confirmation of the presence of a substantial gas reservoir
also establishes very attractive exploration potential in two additional
structures within the Safed Koh Block with significant aerial extent. Of
particular interest is the Afiband structure located four kilometres
south of the Rodho feature. Geophysics at Afiband outlines a structure
of approximately 50 square kilometres in size with vertical closure of
approximately 300 meters at depths comparable to the encountered Rodho
formations.

Development Plan Timing for Rodho No.3

Under the terms of the Safed Koh Concession Agreement, Rally Energy and
its working interest partners have informed The Director General,
Petroleum Concessions, Pakistan ("DGPC"), of the Rodho No. 3 Discovery
and must, within three months of completion of testing, advise DGPC as
to whether this Discovery merits Appraisal. An Appraisal Program must be
submitted for DGPC approval, followed by a notice in writing that
declares whether or not the Discovery is a Commercial Discovery or a
Significant Gas Discovery. A Discovery Area will subsequently be
delineated and a Development Plan will be prepared for approval by DGPC.

Rodho No.2 Well

The Rodho No. 2 well is located approximately 1.3 kilometres north of
Rodho No. 3. As an immediate follow-up to Rodho No.3, the technical
feasibility of deepening Rodho No.2 is being investigated to allow for
further appraisal of the gas bearing Lower Goru formation. The Rodho
No.2 deepening may extend to the prospective Chilton Jurassic Limestone.
The Corporation is carried for its 22.5% working interest on the first
US$530,000 of expenditures on this well.

Area Gas Markets

Safed Koh gas production can be marketed through the existing Sui
Northern gas pipeline which passes within 12.5 kilometres of the Rodho
No. 3 wellsite. Alternatively, the gas can be delivered to the Dhodak
facilities servicing the Dhodak Gas Field, a distance of approximately
15 kilometres. Current area gas demand is significantly in excess of
supply. Area gas pricing is currently US $2.55/mcf.

Safed Koh

Rally Energy's Safed Koh Block, covering 1,213 square kilometres, is
located in the Province of Punjab, immediately south of the Dhodak gas
field, Pakistan's largest gas and condensate producing field. The Dhodak
Field, with an estimated 620 Bcf of proven gas reserves and 30 million
barrels of condensate, is located in the Central Indus Basin
approximately 15 kilometres north of our Saked Koh Block. In April, 30%
of the current Safed Koh Block concession area, as selected by the
working interest holders, will be surrendered to the Pakistan Government
under mandatory concession relinquishment provisions.

FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. These
statements are based on current expectations that involve a number of
risks and uncertainties, which could cause actual results to differ from
those anticipated. These risks include, but are not limited to: the
risks associated with the oil and gas industry (e.g., operational risks
in development, exploration and production; delays or changes in plans
with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty of
estimates and projections relating to production, costs and expenses,
and health, safety and environmental risks), commodity price, price and
exchange rate fluctuation and uncertainties resulting from potential
delays or changes in plans with respect to exploration or development
projects or capital expenditures. Additional information on these and
other factors that could affect the Corporation's operations or
financial results are included in the Corporation's reports on file with
Canadian securities regulatory authorities: www.sedar.com.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Rally Energy Corp.
    Lamont Tolley
    President & CEO
    (403) 538-0000
    (403) 538-3705 (FAX)
    or
    Rally Energy Corp.
    Douglas C. Urch
    Vice President, Finance & CFO
    (403) 538-0000
    (403) 538-3705 (FAX)
    Website: www.rallyenergy.com
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.