TAMM Oil & Gas Corp.
OTC Bulletin Board : TAMO

August 22, 2011 08:05 ET

TAMM Oil and Gas Corp. Reviews and Approves Manning Heavy Oil Project

CALGARY, ALBERTA--(Marketwire - Aug. 22, 2011) - TAMM Oil and Gas Corp. ("TAMM") (OTCBB:TAMO) is pleased to announce they have reviewed and approved the Manning heavy oil work program proposed by their farm-in partner.

On March 15, 2011 Cougar Oil and Gas Canada Inc. ("COUGF") entered into a multi-phase farm-in agreement with TAMM to define and develop TAMM's 47 section Manning area heavy oil prospect. The first phase of the farm-in consists of COUGF performing a $2.5million work program to earn a 30% working interest in the heavy oil prospect. One of the requirements of the farm-in was for COUGF to present for TAMM's review and approval a development plan for the first $2.5million work program. TAMM management and Board of Directors has reviewed the work program and provided COUGF with the approval to continue.

This work program will be done at no cost and no risk to TAMM and will dramatically increase the value of the Manning heavy oil project. The work program proposed by COUGF will focus on defining the Elkton and Debolt heavy oil prospects and will consist of the following operations;

  • Multi-well coring program: The target formations, Elkton and Debolt, have been mapped in the Manning area as a result of the numerous deeper conventional wells drilling through the heavy oil prospects but there are very few cores to review in the Manning area. With some areas of the TAMM lands having over 30m of potential oil pay, the core data will provide the foundation of the future development research. The coring program will consist of three to five core holes being drilled to gather Elkton and Debolt samples. The cores will be collected using a preserved technique with the goal of maintaining the original fluid content, fluid distribution, rock wettability and mechanical integrity. The core locations will include the thickest parts of the Elton and Debolt reservoirs in addition to locations which are in close proximity to the eroded edge of the formations which may have improved production qualities. The core date will be used to identify the sweet spots of the Manning heavy oil prospect.
  • Oil sample analysis/Reservoir study: The long term production potential of the TAMM Manning prospect will be largely dependent on analysis of the Elkton and Debolt oil samples and the completion of additional in-depth reservoir analysis. The viscosity and specific gravity of the oil samples are important indicators to evaluate the oil quality. That information along with the porosity, permeability and reservoir pressure will be used to simulate various primary and secondary production techniques including the utilization of steam and solvents. Small samples of the core will be used to evaluate the movability of the oil contained in the carbonate rock using heat, chemicals and pressure.
  • Seismic purchase and review: Approximately 85 to 100Km of trade 2D seismic data will be purchased overlying the TAMM Manning prospect. The seismic will be used to confirm structure and to identify the erosional edge of the Elkton and Debolt formations. The seismic will also be used to identify any Bluesky sandstone channels which run through the property which would become a conventional heavy oil project.
  • Submitting proposal to upgrade prospect from Prospective Resource to Contingent Resource: Using the information collected from the $2.5million work program TAMM will be able to apply to upgrade the quality of the Manning heavy oil prospect to a Contingent Resource. Contingent resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.

On June 8, 2011 TAMM announced an updated Prospective Resource report and 4 section feasibility study had been completed by Chapman Petroleum Engineering Ltd. (Chapman). Please download and review the entire Chapman report from the TAMM website (www.tammoilandgas.com). The Chapman report updated the Petroleum Initially In Place ("PIIP") to reflect the revised guidelines under NI - 51-101 section 5.9 for the 47 sections that TAMM holds in the Manning Heavy Oil Area. The report also evaluated a typical 4 section block for a thermal development to evaluate the feasibility of an economic development of the overall properties. The following is an excerpt from the introduction letter and the project synopsis prepared by Chapman;

"An economic analysis has been performed for the company's interest position. Our analysis and the values presented in this report reflect the typical exploitation of resources on only an arbitrary four section block, which is a small portion of the company's total land holdings covering the heavy oil accumulation."

"Based on our analysis, after consideration of risk, we have concluded that the potential of this project is of sufficient merit to justify the work program being proposed and we therefore recommend and support the company's participation."

"The economic and risk analysis justifying the participation in this project is presented in the Discussion of the report and a summary of the "before and after risk" values for the typical four section development block evaluated herein is presented below:"

"Company Net Value, Thousands of Dollars"
"Before Risk After Risk"
"Undiscounted 2,350,887 523,000"
"Discounted @ 5%/year 1,193,133 258,000"
"Discounted @ 10%/year 632,903 130,000"
"Discounted @ 15%/year 347,418 66,000"
"Discounted @ 20%/year 195,427 32,000"

"An equivalent of 2011 price of $69.47 per STB (barrel) of heavy oil was utilized for this resource evaluation, reflecting a -$5 per STB quality adjustment to posted Alberta heavy oil."

Entering into the farm-in agreement with COUGF allows TAMM to utilize the results to the maximum ability without having to raise capital through debt or equity at this time. COUGF has agreed to operate the Manning heavy oil prospect which also relieves TAMM of the day to day responsibility and liability that would be placed on the operator. TAMM is also studying other heavy oil carbonate projects that are ongoing throughout Alberta and the rest of the world to continues to increase development efficiency.

Additional updates will be provided as information becomes available.

Further information on TAMM and the TAMM projects can be found on the website at: http://www.tammoilandgas.com.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS AND RISKS

Some of the statements in this press release are forward-looking statements and are based on current expectations, assumptions, and estimates. Words and phrases such as "believes", "expect, anticipate", are intended to identify forward-looking statements. Forward-looking statements carry certain risks regarding an assumed set of economic conditions and courses of action, including: (a) whether we will have sufficient financial resources to continue to meet our operational goals and future plans; and (b) the Report and its findings although completed in compliance with Canadian NI- 51-101 standards, were not necessarily prepared in conformity with SEC disclosure principals or guidelines. There is a significant risk that actual material results will vary from projected results. No information provided in this press release should be construed as a representation or indication in any manner whatsoever of the present or future value of the Company or its common stock. Readers of information contained in this press release should carefully review the Company's filings with the Securities and Exchange Commission that contain important information regarding the Company's financial results, its future plans, and their limitations, and the risks involved with the Company's operations. The Company disclaims any responsibility to update forward-looking statements made herein.

CAUTIONARY NOTE TO UNITED STATES INVESTORS

The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms, such as prospective resource or Original Oil in Place (OOIP) or Petroleum Initially In Place (PIIP), that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 10K. You can also obtain this form from the SEC by calling 1-800-SEC-0330. Additional information may be found at the following web site: http://www.sec.gov/divisions/corpfin/guidance/cfoilgasinterps.htm

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