Thunderbird Energy Corp.
TSX VENTURE : TBD
FRANKFURT : M2Y

Thunderbird Energy Corp.

February 14, 2012 09:01 ET

Thunderbird Energy Year End Update

CALGARY, ALBERTA--(Marketwire - Feb. 14, 2012) - Thunderbird Energy Corp. (TSX VENTURE:TBD) ("Thunderbird" or the "Company") today provided an update on operations.

Gordon Creek - Natural Gas

Drilling operations are continuing at the Company's Gordon Creek natural gas field, in the first phase of a planned drilling and workover program to consist of 50 new wells and 5 workovers of existing wells over the next 2 years. The company experienced various delays during the start up of operations in the 4th quarter as a result of substandard performance by certain key service companies, specifically the surveyor and the original drilling contractor. These issues led to permitting and drilling delays. These suppliers have been replaced and drilling operations resumed in January.

The Company is currently operating in the north-western area of the project on privately owned lands that lie outside of the winter closure zones that apply to most State and Federal lands in the Gordon Creek area. To date, three wells have been drilled to depth, logged and cased for production and drilling of the 4th well is nearing total depth. An additional 6 surface holes were drilled and cased in January by a separate, smaller drilling rig that was employed for that purpose. This should speed up future drilling and ultimately reduce overall drilling costs.

Based on log analysis, all three wells drilled to depth so far encountered the Ferron formation as expected, with apparent sand and coal pay thicknesses that equaled or exceeded the Company's prognosis. Initial production rates will not be determinable until the wells are fracture stimulated, equipped and tied in accordance with the Company's Gordon Creek best practices protocol. The Company anticipates mobilizing a frac crew to Gordon Creek, once an additional 4 to 6 wells have been drilled and cased, which is anticipated to occur in March or early April. The workover operations are scheduled to commence following the end of the winter closure restrictions on April 15.

"We are encouraged by the sand and coal pay thicknesses that we are seeing on the logs, particularly as we step out farther from existing production", stated Rick Ironside, President of Thunderbird. "Now that we are beyond the start-up stage, we are also very pleased with how the operations are proceeding and becoming more efficient."

A substantial portion of the funding for these operations is being provided through a $25 million commodity stream agreement with Sandstorm Metals & Energy ("Sandstorm") announced July 13, 2011. As a result of the start up delays referred to above, and the current depressed state of natural gas prices, the Company and Sandstorm have agreed upon a revised operational schedule whereby the Company's commitments under the Sandstorm agreement have been deferred by one year. Specifically, the date for completion of the requirement to drill 15 new wells and complete 5 workover operations has been deferred until December 31, 2012 and the requirement to drill the remaining 35 wells will be deferred to December 31, 2013. The minimum volume requirements and/or cash flow guarantees as set out in the Sandstorm agreement will also be deferred a full 12 months, such that the first guarantee threshold will be December 31, 2013. The Company can accelerate the program as conditions change.

As consideration for these deferments, the Company has agreed to pay Sandstorm a fee of $2,550,000, to be paid in shares of the Company in February 2013, based on the market value of the Company's shares at that time. "We are very pleased to have worked out the revised commitment schedule with Sandstorm" stated Cameron White, CEO of Thunderbird. "The new schedule allows us to time to roll out our development program over the next 2 years, in a way that will maximize the utilization of our resources and capital without time pressures, and will permit us the opportunity to build up our production and cash flows in order to avoid triggering minimum cash flow guarantees under the agreement. Moreover, the deferment of stage 2 drilling until next year, could very well improve long term cash flows to both Thunderbird and Sandstorm as natural gas markets improve."

During the recently completed fiscal year, the Company also expanded its land position by acquiring an additional 2925 net acres of mineral interests adjacent to the existing Gordon Creek lands. The Company currently owns a total of roughly 10,000 acres at Gordon Creek that, based on current spacing, has approximately 65 undrilled locations. Permits have been issued for the initial stage 15 well drilling program and permitting of an additional 40 locations is underway.

The Company has retained GLJ Petroleum Consultants of Calgary, Alberta to prepare a valuation of the Company's Gordon Creek project as at January 31, 2012, in accordance with NI 51-101. Given that active operations are continuing, consideration is also being given to preparing a mid-year valuation update following the first or second quarter of this year.

Gordon Creek - CO2

The Company also wishes to provide an update on the previously announced Southwest Regional Partnership on Carbon Sequestration's (SWP) Carbon Capture and Storage (CCS) deployment phase at Gordon Creek. The Company has been advised that Department of Energy (DOE) funding has recently been instructed by the US administration to terminate funding for all CCS projects of this nature. As part of the termination procedure, the Company will be billing the SWP for recovery of a substantial amount of expenditures incurred over the past 2 years. One significant benefit has been work done to upgrade our injection well in anticipation of injecting water and CO2. The capacity of the well has been increased from approximately 2500 barrels of water per day to an estimated 10,000+ barrels per day. Owing in large part to funding by the DOE the company should now have sufficient injection capacity to handle all of the anticipated water production from the 50 new drill and 5 workovers.

The revised focus of the DOE is on Carbon Capture Utilization and Storage (CCUS), which would encompass operations like enhanced oil recovery (EOR) utilizing CO2. While EOR will indeed be the primary focus of the Company's ongoing development of Gordon Creek CO2, the SWP project was not able to change its focus and achieve the DOE mandated objectives within the current calendar year. While the Company is disappointed by this sudden change in policy, work conducted by the SWP and related entities over the past 2 years has made an important contribution to the Company's understanding of the CO2 underlying Gordon Creek, as well as its development and market potential. Geological studies conducted by the USGS, the University of Utah and others, based in part on a series of test wells drilled in the 1960's and 1970's have estimated the Gordon Creek CO2 resource at anywhere from 140BCF to 1.3 TCF.

The Company plans to aggressively pursue commercial development of this potential resource with a focus on enhanced oil recovery, and has begun discussions with potential development partners and end users. One of the key members of the SWP - the Utah Science Technology and Research Initiative (USTAR) a division of the University of Utah - will continue to work with the Company to provide ongoing scientific research and analysis.

Wyoming - Niobrara Oil

During the year, an initial vertical test well was drilled on the Company's Weston County lands that are prospective for Niobrara oil shales, as well as a number of deeper conventional oil horizons. The deeper Dakota Sandstone, which was the primary target of the well, was determined based on log interpretation, not to be commercially prospective for oil. However, oil shows were encountered as the well was drilled through the Niobrara formation. The Niobrara is an evolving shale oil play in Colorado and Wyoming that is typically exploited through horizontal multi-frac drilling. The Company is closely monitoring the exploration efforts of other companies in the eastern Wyoming Niobrara fairway as activities move north towards the Company's Weston County lands.

Thunderbird Energy is a Canadian-based oil and gas exploration and production Company with interests in the US Rockies and mid-continent regions.

Caution Regarding Forward- looking information

Information in this news release respecting anticipated natural gas and oil development operations and the carbon sequestration project constitutes forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, expectations, or beliefs as to future events or results are believed to be reasonable based on the information currently available to the Company. The Company does not undertake to update any such forward-looking statements unless required by applicable securities legislation.

Statements including forward-looking information involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements.

There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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