TUSK Energy Corporation
TSX : TSK

TUSK Energy Corporation

April 30, 2008 18:23 ET

TUSK Energy Corporation: Reserves Evaluation Effective March 31, 2008

CALGARY, ALBERTA--(Marketwire - April 30, 2008) - TUSK Energy Corporation ("TUSK" or the "Corporation") (TSX:TSK) is pleased to announce that it has received an independent reserves evaluation dated April 21, 2008, effective March 31, 2008 from GLJ Petroleum Consultants Ltd. ("GLJ"). Compared to a similar evaluation prepared effective December 31, 2007 by GLJ, the estimated net present value of future net revenue as at March 31, 2008 (based on forecast prices and costs), discounted at 10% before tax ("NPV10") of TUSK's proved plus probable reserves, increased by $96.0 million to $297.9 million (December 31, 2007 - $201.9 million). The estimated NPV10 of proved reserves increased $48.8 million to $190.6 million (December 31, 2007 - $141.8 million). TUSK estimates that the factors that contributed to the increase in estimated NPV10 of total proved plus probable reserves are as follows: Northeastern British Columbia Asset Swap (announced on March 7, 2008 and completed on March 31, 2008) - 81% increase; new discoveries - 15% increase; higher oil and gas prices - 7% increase; and first quarter 2008 production - 3% decrease.

Total company interest proved plus probable reserves as at March 31, 2008 (based on forecast prices and costs) increased 509 million boes to 13,745 million boes (December 31, 2007 - 13,236 million boes) and total company interest proved reserves as at March 31, 2008 decreased 552 million boes to 8,499 million boes (December 31, 2007 - 9,051 boes). The increase in proved plus probable reserves and the decrease in proved reserves were primarily the result of the Northeastern British Columbia Asset Swap.

A summary of estimated reserves and the net present value of future net revenue as at March 31, 2008 is set out in the tables below (based on forecast prices and costs). The future net revenue figures presented below, whether calculated without discount or using a discount rate, are estimated values and do not represent fair market value.



Total Company Interest Reserves at March 31, 2008
(based on forecast prices and costs)
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Light & Natural Gas Oil
Reserves Medium Oil Natural Gas Liquids Equivalent
Category Gross Net Gross Net Gross Net Gross Net
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(mbbl) (mbbl) (mmcf) (mmcf) (mbbl) (mbbl) (mboe) (mboe)
Proved developed
producing 1,649 1,374 21,255 17,985 415 318 5,607 4,690
Proved developed
non-producing - - 945 796 10 8 168 141
Proved
undeveloped 417 344 12,393 11,039 242 191 2,725 2,375
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Total proved 2,067 1,719 34,593 29,820 667 516 8,499 7,205
Total probable 1,202 979 21,732 18,771 422 329 5,246 4,437
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Total proved
plus probable 3,269 2,698 56,325 48,592 1,089 845 13,745 11,642
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Note: Columns may not add due to rounding


In the tables of reserves data, the term "Gross" refers to total company interest reserves, while the term "Net" refers to company interest reserves after the deduction of royalties.



Net Present Value of Future Net Revenue at March 31, 2008
- Before Income Taxes
(based on forecast prices and costs)

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Sum of Before Tax Cash Flows Discounted Annually at (%)
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Reserves Category 0 5 10 15 20
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($000s)
Proved developed producing 190,097 163,050 143,879 129,559 118,423
Proved developed non-producing 4,632 3,946 3,425 3,018 2,692
Proved undeveloped 66,659 53,431 43,327 35,469 29,259
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Total proved 261,387 220,426 190,631 168,046 150,375
Total probable 180,791 136,433 107,288 87,003 72,270
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Total proved plus probable 442,178 356,860 297,919 255,049 222,644
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Note: Columns may not add due to rounding.


Capitalized terms in the tables above that are not otherwise defined herein have the meanings ascribed thereto under "Statement of Reserves Data and Other Oil and Gas Information" in TUSK's Annual Information Form for the year ended December 31, 2007 filed March 27, 2008. Additional information relating to TUSK and its statement of reserves data and other information dated March 27, 2008 and effective December 31, 2007 is available under TUSK's profile on the SEDAR website at www.sedar.com.

The pricing assumptions used with respect to net present values of future net revenue as well as the inflation rates used for operating and capital costs are set forth below in the GLJ Summary of Pricing and Inflation Rate Assumptions as at April 1, 2008.



GLJ Summary of Pricing and Inflation Rate Assumptions
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Oil Natural Gas Edmonton Natural Gas Liquids
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Light Sweet
NYMEX Crude Oil
WTI 40 degrees
Cushing, API at AECO/NIT Pentanes
OK Edmonton Spot Propane Butane Plus
Year ($US/bbl) ($Cdn/bbl) ($Cdn/mmbtu) ($Cdn/bbl) ($Cdn/bbl) ($Cdn/bbl)
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2008 97.41 96.93 8.11 60.41 78.42 98.65
2009 90.00 89.10 8.20 56.13 71.28 90.88
2010 86.00 85.10 8.10 53.61 68.08 86.80
2011 85.00 84.10 7.95 52.98 67.28 85.78
2012 85.00 84.10 8.01 52.98 67.28 85.78
2013 85.00 84.10 8.18 52.98 67.28 85.78
2014 85.00 84.10 8.36 52.98 67.28 85.78
2015 86.15 85.25 8.54 53.71 68.20 86.96
2016 87.87 86.97 8.72 54.79 69.58 88.71
2017 89.63 88.73 8.91 55.90 70.98 90.51
2018+ Escalate at 2.0%/yr thereafter
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Note: Inflation rate has been assumed constant at 2% annually with a
constant exchange rate of 1.0 $US per $CDN.


TUSK is engaged in the acquisition, exploration, development and production of oil and natural gas reserves in three focus areas in the north-western part of the Western Canadian Sedimentary Basin. TUSK is developing natural gas in the Conroy area of northeastern British Columbia and light oil and natural gas in the Peace River Arch and Mega/Gutah areas of northern Alberta. TUSK has 90,442,000 common shares outstanding.

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

This news release contains forward looking statements with respect to TUSK's reserves, and future net revenue for those reserves and other statements that are not statements of fact. Although TUSK believes that the expectations reflected in such forward looking statements are reasonable, it can provide no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward looking statements. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward looking statements contained in this release include, but are not limited to: the lack of precision around estimates of reserves, performance of the company's oil and gas properties, volatility in market prices for oil and gas, geological, technical, drilling and processing problems, changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by the company. You are cautioned that the foregoing list of important factors is not exhaustive. These statements speak only as of the date of this news release and TUSK does not undertake any obligation to update publicly or to revise any of the included forward looking statements, other than as required by law. The forward looking statements contained in this release are expressly qualified by this cautionary statement.

Contact Information

  • TUSK Energy Corporation
    John Rooney
    Chief Executive Officer
    (403) 264-8875
    or
    TUSK Energy Corporation
    Michael Makinson
    VP Finance
    (403) 264-8875
    Website: www.tusk-energy.com