Sagres Energy Inc.
TSX VENTURE : SGI

March 07, 2011 07:00 ET

Sagres Energy Inc. Provides Update on the Apoteri K-2 Exploration Well in Guyana

CALGARY, ALBERTA--(Marketwire - March 7, 2011) - Sagres Energy Inc. ("Sagres" or the "Corporation") (TSX VENTURE:SGI) is pleased to provide an update on the drilling of the Apoteri K-2 ("K-2") exploration well on the Takutu Block in Guyana. The K-2 well will be drilled to a measured depth of approximately 11,000 feet and will target the same productive reservoirs that tested over 400 barrels of oil per day of 42° API light oil from the Karanambo 1 well drilled in 1982 and located 600 meters away. Gaffney Cline and Associates attributed gross mean recoverable prospective resources of 128 million barrels of oil (32 million barrels net to Sagres) to the discovery in a December 2009 report compiled for the Corporation. Canacol Energy Ltd. ("Canacol") has a 90% working interest in the contract, with Groundstar Resources Limited ("Groundstar"), the operator of the Petroleum Prospecting License ("PPL"), holding the remaining 10%. Sagres has the right to earn a 25% working interest in the PPL from Canacol by paying for 30% of the cost to drill the K-2 exploration well. 

As of the morning of Friday March 4, 2011, the K-2 well was drilling ahead at a depth of 7,366 feet measured depth ("ft md") within the Jurassic Pirara formation. Intermediate casing is planned to be set at approximately 8,970 ft md prior to drilling through the primary reservoir targets in the Manari and Apoteri formations. Drilling had been interrupted in early January 2011 due to the late arrival of some of the permanent camp facilities provided by Tuscany International Drilling Inc., which arrived on location in late January. The drilling operation since then has progressed according to plan.

About Sagres

Sagres Energy Inc. is a Canadian based international oil and gas exploration company with an exploration portfolio in Guyana and Jamaica. In Jamaica, Sagres holds 3 licenses, covering 8800 square kilometers offshore Jamaica. These three blocks are in shallow water (less than 30 meters ), with several strong leads and two drill-ready prospects. Chapman Petroleum Engineering Ltd. attributes a gross mean recoverable resource of 3 billion barrels to these blocks. Sagres is also in the process of completing the acquisition of a private company which would see the addition of 2 to 4 blocks in Columbia and/or Peru to Sagres Energy Inc. The common shares of Sagres are listed for trading on the TSX Venture Exchange under the symbol "SGI".

Cautionary Statements

Forward-looking statements

This news release contains forward-looking statements relating to drilling the K-2 well and other prospects located in the Takutu Basin, expected drilling depth and bottom hole location of the K-2 well, and the prospective resource estimates for the Guyana and Jamaica prospects. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the expectations, estimates, forecasts, and projections in the forward-looking statements will not occur. As such, readers are cautioned that actual performance and results in the future may differ materially from any estimates, expectations or projections of future performance or anticipated results expressed or implied by such forward-looking statements.

These assumptions include, among other things, assumptions regarding: the proper performance by Tuscany of its obligations under the contract for the provision drilling services; the accuracy and reliability of the geological and other data available to the Sagres relating to the evaluation of the Guyana and Jamaica prospects and the exercise of professional judgment by Sagres and others regarding the interpretation and conclusions drawn from such data; the general stability of the economic and political environment in which Sagres operates; the timely receipt of any required regulatory approvals; the ability of Sagres and its joint venture partners to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which Sagres has an interest in to operate the field in a safe, efficient and effective manner; the ability of Sagres to obtain financing on acceptable terms; field production rates and decline rates; development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of Sagres 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 Sagres operates; and the ability of Sagres to successfully market its oil and natural gas products.

Risks and uncertainties include, among other things: the risks and level of uncertainty associated with the recovery of the resources; risks associated with changes in general economic and market conditions, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserves and resources estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, 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, and other risk factors outlined under "Risk Factors" contained in Sagres' joint management information circular dated March 8, 2010 and the appendices thereto.

Additional information on these and other factors that could effect Sagres' operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

The forward-looking statements contained in this press release are made as of the date of this press release. Except as required by law, Sagres disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Sagres undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

Resource estimates
The resource estimates above are for prospective resources, which is defined as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources. 

A copy of the Guyana Takutu Basin Evaluation of Gaffney Cline and Associates is included in Sagres' joint management information circular dated March 8, 2010 and may be accessed under Sagres' profile through the SEDAR website (www.sedar.com). Details concerning the independent resource evaluation prepared by Chapman Petroleum Engineering Ltd. in relation to the Jamaica prospects can be found in Sagres' news release of August 27, 2010 and may also be accessed under Sagres' profile through the SEDAR website (www.sedar.com). Both evaluations were prepared in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook. Both Gaffney Cline and Chapman are qualified reserves evaluators and are independent of Sagres, each as determined in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

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

Contact Information

  • Sagres Energy Inc.
    Dr. David Johnson
    President & CEO
    (403) 978-9878
    or
    Sagres Energy Inc.
    Jason Bednar
    Chief Financial Officer
    (403) 607-4607