Sagres Energy Inc.

April 25, 2011 09:00 ET

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

CALGARY, ALBERTA--(Marketwire - April 25, 2011) - Sagres Energy Inc. ("Sagres" or the "Company") (TSX VENTURE:SGI), an international oil and gas exploration company with an exploration portfolio in Guyana, Colombia and Jamaica, provides the following update of the Apoteri K-2 ("K-2") exploration well on the Takutu Block in Guyana. The K-2 well reached the programmed total measured depth of 9,812 feet within the Apoteri Formation, the primary target of the well, on April 20, 2011. The top of the Apoteri Formation was encountered at 8,300 feet measured depth ("ft md"), with light oil and gas shows encountered from 8,300 to 9,376 ft md. Reservoir quality in this zone however is poor based on openhole logs and drilling indicators. Three drill stem tests ("DSTs") were performed in this interval, one was a mechanical failure and the other two were mechanically successful but failed to recover any reservoir fluids, indicating very tight reservoir.

Starting at 9,764 through to 9,812 ft md mud losses of up to 3.6 barrels per minute were encountered, indicating the presence of a significantly fractured reservoir zone within the Apoteri Formation in proximity to the main bounding fault. A DST was performed across this fractured interval on April 22, 2011, testing approximately 1,500 barrels of formation water per day with no trace of oil. Although excellent reservoir quality was encountered in this interval of the Apoteri Formation, the fractured reservoir appears to have been penetrated below the oil – water contact, defined by the interval of oil and gas shows higher up in the section between 8,300 and 9,376 ft md.

Over the course of the next week the Apoteri K-2 well will be permanently abandoned, and the consortium is currently evaluating the next exploration drilling location on the block.

Canacol Energy Ltd. has a 65% working interest in the contract, with Groundstar Resources Limited, the operator of the Petroleum Prospecting License ("PPL"), holding 10%. Sagres Energy Inc. has earned a 25% working interest in the PPL from Canacol by paying for 30% of the cost to drill the K-2 exploration well.

About Sagres

Sagres Energy Inc. is a Canadian based international oil and gas exploration company with an exploration portfolio in Colombia, Guyana and Jamaica. The common shares of Sagres are listed for trading on the TSX Venture Exchange under the symbol "SGI".

Resource estimates and other forward-looking information

This news release contains forward-looking information relating to the abandonment of the Apoteri K-2 well, the evaluation of the next exploration drilling location on the block. and other statements that are not historical facts. Forward-looking information relates to management's future outlook and anticipated events or results, and may include statements or information regarding the future plans or prospects of the Company.

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; 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 of the operator of the projects which the Company has an interest in to operate the field 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 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 Company's joint venture 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.

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.

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
    (403) 978-9878

    Sagres Energy Inc.
    Jason Bednar
    Chief Financial Officer
    (403) 607-4607