Solara Exploration Ltd.
TSX VENTURE : SAA.A
TSX VENTURE : SAA.B

Solara Exploration Ltd.

May 15, 2008 08:30 ET

Solara Exploration Announces Increased Oil and Gas Reserves Effective March 31, 2008

CALGARY, ALBERTA--(Marketwire - May 15, 2008) - Solara Exploration Ltd. ("Solara" or the "Company") (TSX VENTURE:SAA.A) (TSX VENTURE:SAA.B) is pleased to announce that it has received an independent reserves evaluation dated March 31, 2008 from GLJ Petroleum Consultants Ltd. ("GLJ").

Overview

- Total Company interest proved plus probable reserves increased 30% from 871,000 BOEs at December 31, 2007 to 1,131,000 BOEs at March 31, 2008

- The net present value (PV 10%) of the proved plus probable reserves rose 24% from $17.6 million at December 31, 2007 to $21.9 million at March 31, 2008

Discussion

Solara completed the acquisition of certain oil and gas assets in northeastern Alberta on January 25, 2008 for $1,050,000 as previously disclosed in a press release on January 28, 2008 (the "Craigend Asset Acquisition"). As well, the Company participated in various recompletions and in the drilling of a gas well which resulted in reserve additions since year end 2007. Forecast pricing for both oil and natural gas has increased since January 1, 2008. For these reasons, Solara engaged GLJ to undertake an updated independent reserve evaluation at March 31, 2008.

The following table summarizes the net present value of future net revenues as at March 31, 2008 based on the independent evaluation performed by GLJ. The future revenue amounts presented below, whether calculated without discount or using a discount rate, are estimated values based on GLJ's pricing forecasts at April 1, 2008, and do not represent fair market value.



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Reserves Category Sum of Before Tax Cash Flows Discounted
Annually at(%)
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0 5 10 15 20
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($000s)
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Proved developed producing 16,257 14,304 12,829 11,674 10,745
Proved developed non-producing 3,222 2,727 2,343 2,039 1,794
Proved undeveloped 1,754 1,367 1,088 882 725
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Total proved 21,234 18,398 16,260 14,595 13,263
Total probable 10,566 7,535 5,681 4,454 3,598
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Total proved plus probable 31,799 25,933 21,941 19,049 16,861
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In the March 31, 2008 GLJ report, the net present value of future net revenues of Solara's proved plus probable reserves, discounted at 10% before tax ("PV 10%"), increased by $4.3 million to $21.9 million (December 31, 2007 - $17.6 million). The estimated PV 10% value of proved reserves increased $2.87 million to $16.26 million (December 31, 2007 - $13.39 million). The reasons for these changes are mentioned above.

The pricing assumptions used with respect to the net present values of future net revenues are published on the GLJ website at www.gljpc.com. The inflation rate has been assumed constant at 2% per annum with a constant exchange rate of $1.00 U.S. per $1.00 CDN.

A summary of the estimated reserves by category as at March 31, 2008 are set out in the table below. Note that these estimates have been prepared by GLJ and may not be fully realized in the future.



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Reserves Category Light/Medium Natural Gas Natural Gas Oil
& Heavy Oil Liquids Equivalent
Gross W.I. Gross W.I. Gross W.I. Gross W.I.
(mbbl) (mbbl) (mmcf)(mmcf) (mbbl)(mbbl) (mBOE) (mBOE)
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Proved developed
producing 215 213 1,578 1,569 21 21 499 495
Proved developed
non-producing 3 3 983 983 0 0 167 167
Proved undeveloped 41 41 148 148 0 0 66 66
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Total proved 259 257 2,709 2,699 21 21 732 728
Total probable 93 92 1,777 1,774 11 11 400 399
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Total proved plus
probable 352 349 4,485 4,474 32 31 1,131 1,127
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Note: W.I. represents working interest reserves


Total Company interest proved plus probable reserves as at March 31, 2008 increased 260,000 BOEs to 1,131,000 BOEs (December 31, 2007 - 871,000 BOEs), and total Company interest proved reserves increased 148,000 BOEs to 732,000 BOEs (December 31, 2007 - 584,000 BOEs) based on GLJ's evaluation. The increase in proved reserves resulted primarily as a result of the Craigend Asset Acquisition which was completed in January, 2008.

Summary

The Craigend Asset Acquisition and operational activities together with a higher commodity pricing forecast at March 31, 2008 have resulted in an overall increase of 30% in Solara's oil and gas reserves, and a reserve valuation (PV 10%) increase of 24% since year end 2007.

About Solara Exploration

Solara Exploration is a publicly traded junior oil and gas company focused on the exploration, development and acquisition of oil and natural gas in western Canada.

READER ADVISORY

This news release may contain certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, 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, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits, including the amount of proceeds, that the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

25,239,692 Class A Shares

1,026,800 Class B Shares

The TSXV has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Solara Exploration Ltd.
    Donald R. Holding
    President and Chief Executive Officer
    (403) 537-0458
    (403) 537-0462 (FAX)
    Email: don_solaraexploration@shaw.ca
    or
    Solara Exploration Ltd.
    1800, 444 - 5th Avenue S.W.
    Calgary, Alberta, Canada T2P 2T8