Sahara Energy Ltd.
TSX VENTURE : SAH
PINK SHEETS : SAHRF

Sahara Energy Ltd.

June 11, 2008 16:21 ET

Sahara Energy Announces Filing of Its 2007 Year End Disclosure Documents and Releases First Quarter Results

CALGARY, ALBERTA--(Marketwire - June 11, 2008) - Sahara Energy Ltd. (TSX VENTURE:SAH) (PINK SHEETS:SAHRF) ("Sahara" or the "Company") today filed its reserve data and other oil and gas information for the year ended December 31, 2007 as mandated by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators.

Sahara has also filed its audited consolidated financial statements and accompanying notes for the year ended December 31, 2007 and related Management Discussion and Analysis with Canadian Securities Regulatory Authorities. Copies of Sahara's 2007 disclosure documents may be obtained at www.sedar.com.

Sahara is pleased to announce its financial and operating results for the quarter ended March 31, 2008.

Gross revenue for the period totalled $876,578, compared to $814,134 for the same period last year; an increase of $62,444. The revenue net of royalties for the period was $874,732 compared to $676,587 for the same period in 2007. This is an increase of $198,145.

As at March 31, 2008, the Company reported a bank overdraft of $ 336,638 and a working capital deficiency of $3,487,645 compared to $4,337,515 reported in the period ending March 31, 2007. Included in the working capital deficiency is $1,199,099 in convertible debentures due June 29, 2009 and convertible at $0.90. The company has a credit line facility in the amount of $336,638 which is included in the deficiency. Sahara will dispose of non-core properties to increase its working capital position.

The Company had a loss of $ 547,894 for the three months ended March 31, 2008. Adjusting the net loss for non-cash items of depletion, depreciation, accretion and stock-based compensation, the Company had a net gain of $ 157,127 for the three months ended March 31, 2008.

For the three month period ended March 31, 2008, the Company had a gain of $1,941,504 from the sale of P&NG properties.

Sahara has tax pools that amount to a total of $14,354,000. Sahara owns lands totalling 25,654 gross acres and 12,842 net acres in Alberta, Saskatchewan and Montana. Sahara's independent reserve appraisal report effective April 1, 2008 gives Sahara's proved and probable reserves a value of $11,408,000 discounted at 10% before income tax.

Sahara's oil sales volume during the first quarter averaged 134 boepd. During the first quarter Sahara focused on selling non-core properties and paying down debt. During the period properties were sold at Tangent, Pembina and Gold Creek in Alberta for a total amount of $1,957,609. After the reporting period a property was sold at Buzzard in western Saskatchewan for $1,387,141. The total property sales of $3,344,751 were used to pay down debt.

During the first quarter of 2008, Sahara operated the drilling of one 100% oil well and two recompletions, all at Lloydminster, The oil well was cased and equipped and will be completed in the near future, the recompletions are being evaluated.

Sahara is currently producing 90 boepd consisting of 80 bopd of heavy oil and 10 boepd of gas. The new 100% interest heavy oil well is expected to produce at a rate of 75 bopd, allowing Sahara to produce at an anticipated rate of 160 bopd.

Sahara has eight 100% owned heavy oil locations located at Hayter and Lloydminster Alberta and one 94% interest high impact Nisku light oil prospect located at Bashaw Alberta.

Sahara is a junior oil and gas company focused on the exploration and development of oil and gas in western Canada.

READER ADVISORY

Statements in this press release may contain forward-looking statements including expectations with respect to future events and the actions of third parties. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ materially from those anticipated. These risks include, but are not limited to: the underlying risks of the oil and gas industry (i.e. operational risks in development, exploration and production; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserves estimates; the uncertainty of estimates and projections relating to production, costs and expenses, adequate available financing and health, safety and environmental factors), commodity price and exchange rate fluctuation and uncertainties.

The term "BOE" may be misleading, particularly if used in isolation. In accordance with NI 51-101, a BOE conversion ratio for natural gas of 6 mscf: 1 bbl has been used which is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

38,036,301 shares outstanding

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Sahara Energy Ltd.
    Peter J. Boswell
    President and CEO
    (403) 232-1359
    Email: pete@saharaenergy.ca
    or
    Sahara Energy Ltd.
    Duffy Lewis
    CFO
    (403) 232-1359
    Email: quentin@saharaenergy.ca
    or
    Sahara Energy Ltd.
    800, 510 - 5th Street S.W.
    Calgary, Alberta T2P 3S2