Ranger Energy Ltd.
TSX VENTURE : RGG

September 22, 2010 09:00 ET

Ranger Energy Increases Viking and Cardium Oil Assets and Provides Updated Reserve and Resource Assessment

CALGARY, ALBERTA--(Marketwire - Sept. 22, 2010) - Ranger Energy Ltd. ("Ranger" or the "Corporation") (TSX VENTURE:RGG) is pleased to announce that it has signed a binding letter of intent to add to its existing Viking and Cardium land base. The letter agreement, with an Alberta based private company, allows the Corporation to earn a 100% interest in an additional 5 sections of land subject to a gross overriding royalty to Privateco. The additional 5 sections are contiguous with the Corporation's existing lands. The total combined land position held under letters of intent now consists of 27.5 sections with significant vertical well control adjacent to a highly prospective Viking horizontal oil project. The agreement commits Ranger to issue a non-convertible promissory note to Privateco in the amount of $1,584,848 and 100,000 shares of Ranger as payment for the acquisition. The promissory note will be due on November 25, 2010.

Ranger retained Reliance Engineering Group Ltd. ("Reliance"), an independent qualified Calgary based engineering firm, to provide reserve estimates on the Viking and Cardium lands. The report dated August 20, 2010, with an effective date of July 31, 2010; attributes 1,822 thousand possible (3P) barrels oil of equivalent recoverable with an estimated net present value of $22.2 million to the Ranger on unearned lands under option. This net present value is before income taxes and is based on forecast pricing discounted at 10%. The reserve report was prepared in accordance with National Instrument 51-101 using the assumptions and methodology outlined in the Canadian Oil and Gas Evaluation Handbook. See below for the summary of reserves.

Summary of Company Interest Oil and Gas Reserves (Before Royalties)- As at July 31, 2010
  Oil   NGLs   Gas   Total   B-Tax 10%  
Reserves Category (Mbbl ) (Mbbl ) (MMcf ) (MBOE ) ($MM )
Total Proved 0   0   0   0   0.0  
Probable 444   0   0   444   4.3  
Total Proved and Probable 444   0   0   444   4.3  
Possible 1,263   19   940   1,438   18.0  
Total Proved, Probable and Possible 1,706   19   940   1,882   22.2  

As well, Ranger retained Reliance to provide a contingent resource report on the Viking and Cardium lands. The Report was prepared in accordance with National Instrument 51-101 using the assumptions and methodology outlined in the Canadian Oil and Gas Evaluation Handbook. The report dated September 2, 2010, with an effective date of July 31, 2010, is summarized below:

Summary of Company Interest Oil and Gas Resources (Before Royalties) - As at July 31, 2010
   
  Low Best High
Oil (Mstb)      
Cardium 559 745 1,117
Viking 1,549 2,084 3,155
Total Oil 2,108 2,829 4,272
       
Gas (MMcf)      
Cardium 1,933 2,347 2,540
Viking 1,290 1,567 1,696
Total Gas 3,223 3,914 4,236
       
Total (MBOE)      
Cardium 881 1,136 1,541
Viking 1,764 2,345 3,437
Total 2,645 3,481 4,978
       

Readers' Advisory

Barrel of Oil Equivalent: Where amounts are expressed on a barrel of oil equivalent ("boe") basis, natural gas volumes have been converted to boe at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent. This conversion ratio is based upon an energy equivalent conversion method primarily applicable at the burner tip and does not represent value equivalence at the wellhead. Boe figures may be misleading, particularly if used in isolation.

Reserves and contingent resources involve different risks associated with achieving commerciality. There is no certainty that it will be commercially viable to produce any portion of the contingent resources. Please refer to the attached reserve and resource definitions and safe-harbour discussion of risks. Future net revenues associated with reserves and resources do not necessarily represent fair market value.

The forecast pricing, effective July 31, 2010, has been developed by Reliance and is as follows:

  Oil 1 Gas 2
Year $CDN/bbl $CDN/Mcf
2010 83.25 4.40
2011 86.40 5.00
2012 89.60 5.70
2013 92.75 6.20
2014 95.90 6.55
2015 3 97.85 6.80
 
Notes:
    (1) Based on Edmonton light crude of 40 API of 0.5% sulphur adjusted for gravity and transportation
    (2) Adjusted for heating value and aggregator contract price
    (3) Prices escalated at 1.5% per year thereafter

Definitions

"Best (P50)" means the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered 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 recovered will equal or exceed the best estimate.

"Contingent Resources" means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage.

"High (P10)" means an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

"Low (P90)" means a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

"Probable reserves" means those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated Proved plus Probable reserves.

"Possible reserves" means those additional reserves that are less certain to be recovered than probable reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated Proved plus Probable plus Possible reserves.

"Proved reserves" means those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated Proved reserves.

Safe Harbour

Forward-Looking Information

This news release contains certain "forward-looking information" within the meaning of applicable securities law including, but not limited to, estimates as to: reserves, resources, recoverability, the proposed financing strategy for Ranger and timing in connection therewith, the proposed construction, the timing for receipt of applicable regulatory approvals necessary to proceed with development, the timing of construction, future production, planned drilling activities on the lands and the Company's future strategy.

Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed" and other similar words, or statements that certain events or conditions "may" or "will" occur. These statements are only predictions. Forward-looking information is based on the opinions and estimates of management with respect to results of operations, production, future commodity prices and exchange rates, future capital and other expenditures, business prospects and future economic conditions as at the date the statements are made. Forward- looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, but are not limited to the inherent risks involved in the exploration and development of conventional oil and gas properties, difficulties or delays in securing required regulatory approvals and in the construction, commissioning and start-up operations, the uncertainties involved in interpreting drilling results and other geological data, fluctuating commodity prices, the possibility of unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed for construction in the future and risks and uncertainties associated with the impact of general economic conditions and other factors including unforeseen delays. As an oil and gas enterprise in the early stage of development with conventional production, Ranger faces risks including those associated with exploration, development, start-up, approvals and the continuing ability to access sufficient capital from external sources as required. Actual timelines associated with receipt of regulatory approvals, completion of construction and start-up of development and the drilling and production on the lands may vary from those anticipated in this news release and such variations may be material. Industry related risks could include, but are not limited to, operational risks in exploration, development and production, delays or changes in plans and the timing of capital expenditures, risks associated to the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. For a description of the risks and uncertainties facing Ranger and its business and affairs, readers should refer to Ranger's most recent fiscal year end Management Discussion and Analysis. Ranger undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change, unless required by law.

Due to the risks and uncertainties associated with forward-looking information, the reader is cautioned not to place undue reliance on this forward-looking information.

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