Sahara Energy Ltd.

Sahara Energy Ltd.

November 30, 2007 18:15 ET

Sahara Energy Releases Third Quarter Results

CALGARY, ALBERTA--(Marketwire - Nov. 30, 2007) - Sahara Energy Ltd. (TSX VENTURE:SAH) (PINK SHEETS:SAHRF) ("Sahara" or the "Company") is pleased to announce its financial and operating results for the quarter ended September 30, 2007.

Gross revenue for the period totaled $717,621 compared to $262,825 for the same period last year, an increase of $ 454,796.

As at September 30, 2007, the Company reported a working capital deficiency of $3,775,969 compared to $3,643,003 reported in the second quarter. Included in the working capital deficiency is a bank overdraft of $1,711,089 and $520,000 in convertible debentures converted at $0.57 that mature December 31, 2007. Additional convertible debentures of $680,000 that mature June 29, 2009 and convert at $0.90 in June /2009. Sahara will dispose of non-core properties to increase its working capital position.

The Company had a loss of $ 647,226 for the three months ended September 30, 2007. Adjusting the net loss for non-cash items of depletion, depreciation, accretion and stockbased compensation, the Company had a net loss of $ 279,943 for the three months ended September 30, 2007. Management of Sahara has decided to reduce management salaries by 40% effective immediately.

For the three month period ended September 30, 2007, the Company had capital expenditures of $244,007 of which $135,973 which was spent on drilling and completion, $88,310 on well equipment and facilities, and $ 19,724 on land and other costs.


During the third quarter of 2007, Sahara was involved in drilling 3 prospects, two wells at Buzzard , Saskatchewan and one well at Lashburn, Saskatchewan , resulting in 2 producing oil wells and 1 well waiting on completion.

The Company is currently producing 175 boepd which consists of 100 bopd of heavy oil, 45 bopd light oil and 200 mcfd gas. During the quarter, the Company averaged production sales of 160 boepd, up from 150 boepd in the prior quarter. Marginal wells were either reworked to increase productivity or shut-in to reduce costs.

At Tangent, Alberta, our Montney oil discovery continued to produce at 90 gross bopd, net 30 bop/d and the flared gas has now been tied in to sales line. Initial production of 100 mcf/d (30 mcf/d net) will be monitored and optimized with time. The gas was tied in late in the quarter and recorded minimal sales during the period.

Government requirements for a water disposal application at Provost, resulted in 10 BOPD of medium oil being shut in. This application should be approved before year end. This should enable production from this property to double to 20 bopd. Negotiations continue with respect to allowing gas to be processed at a non-operated facility for our Simonette gas well , resulting in 400 mcf/d being shut-in. At Malmo, Alberta, a Belly River well (12%WI) is in the processing of being tied in, at a rate of 300 mcf/d (36 mcf/d net).

Sahara has behind pipe production capability of 120 BOEPD consisting of 20 bpd oil and 600 mcfd (100 boepd) gas for total production capability of 295 BOEPD.

Within the next month, depending on future financings, Sahara will operate the drilling of 1 heavy oil development well. In Alberta, 2 test wells were farmed out to an industry partner at Hayter (50%) and have been drilled and cased. A completion rig will be moved in next week to test and evaluate both wells. An additional test well was farmed-out at Lloydminster, Alberta (W.I. 75%).

Sahara will continue to add to its prospects inventory through land acquisitions. At Bashaw, Alberta a half section of land was acquired with a Nisku reef prospect, with potential oil reserves of 500,000 barrels. Sahara operates and owns 50% of this high impact light oil play.

Additional Information

Sahara's unaudited consolidated financial statements and relating managements' discussion and analysis for the three months ended September 30, 2007 have been filed on SEDAR at For additional information on the Company, please go to the Company's profile at SEDAR.

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

BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 McF:1bbl is based on an energy equivalency conversion method primarily applicable at the burner top and does not represent a value equivalency at the wellhead.

Reader Advisory

Statements in this press release may contain forward-looking statement 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 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
    Sahara Energy Ltd.
    Quentin C. Enns
    VP - Exploration
    (403) 232-1359
    Sahara Energy Ltd.
    800, 510 - 5th Street S.W.
    Calgary, Alberta T2P 3S2