Sagres Energy Inc.

April 25, 2011 09:15 ET

Sagres Energy's Jamaica Blocks, 9, 13 and 14, Granted 9 Month Extension by Petroleum Corporation of Jamaica

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, announced today that the Petroleum Corporation of Jamaica (PCJ) has approved a 9 month extension of the Initial Exploration Period on Sagres' offshore blocks 9, 13, and 14. The Initial Exploration Period, Phase 1 will now end December 15, 2011, by which time Sagres must elect whether to enter Phase 2. Phase 2 of the Initial Exploration Period for each block carries a one well commitment and now must be completed by December 15, 2013.

Under Phase 1 of the Initial Exploration Period, Sagres has conducted bathymetric, geologic, seismic, and environmental surveys of blocks 9, 13, and 14, and regional geologic surveys of the adjacent Walton and Lower Walton basins, and the Island of Jamaica. Sagres has met all the work commitment under Phase 1. On August 27, 2010, Sagres announced the results of an independent evaluation of the resource potential prepared by Chapman Petroleum Engineering Ltd. ("Chapman"); "certain prospects identified in Sagres' blocks 9, 13 and 14 in the shallow-waters (20 metres) of the Pedro Bank 120 kms offshore Jamaica, show a gross mean prospective resource estimate (oil) of 3.0 billion barrels". Chapman is a qualified reserves evaluator and is independent of Sagres, each as determined in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. Sagres holds a 100% interest in each block and is currently seeking a partner to proceed with exploration drilling.

David Johnson, President and CEO of Sagres Energy commented that, "There is renewed interest in exploration in Jamaica, with 9 of 11 previously drilled wells having oil shows, 3 potential source rocks, a new CGG-Veritas multi-client seismic survey revealing greater than 10km of sedimentary fill in a previously unmapped deep-water Lower Walton basin, and a new deep-water lease round currently underway." The newly released blocks in the Lower Walton Basin lie immediately south and adjacent to Sagres' blocks 13 and 14. The deep-water bid round is scheduled to close September 1, 2011. David further commented that, "Jamaica is ready to commercialize its resource potential with refining capacity of 45,000 barrels of oil per day; electricity generators that accept gas, oil, or biodiesel fuels; established bauxite, shipping, and cement industries; and a geographic position central to the major global marine trade routes."

The resource estimates above are for prospective resources, which are 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.

Sagres is continuing to pursue joint venture partners to further explore and develop its interests in the blocks. Several international energy companies have signed confidentiality agreements with Sagres in order to access the data for the blocks, and evaluate the potential for a joint venture. Sagres does not currently expect to incur any material expenditures in respect of the blocks in 2011.

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 resource estimates, pursuit of joint venture partners, expectations regarding capital expenditures 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.

Sagres has no reserves. The estimates of petroleum volumes described in this news release are for prospective resources only. These estimates constitute forward-looking information. Resources estimates are subject to certain assumptions, risks and uncertainties, including those associated with the drilling and completion of future wells, limited available geological data and uncertainties regarding the actual production characteristics of, and recovery efficiencies associated with, the reservoirs, all of which are being assumed. As estimates, there is no guarantee that the estimated resources will be recovered or produced. Actual resources may be greater than or less than the estimates provided in this presentation. There is no certainty that any portion of these prospective resources described below will be discovered. There is also no certainty that it will be commercially viable to produce any portion of such prospective resources.

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