SOURCE: UnionTown Energy Inc.

UnionTown Energy Inc.

April 26, 2011 06:30 ET

UnionTown Energy (UTOG) Announces Purchase of 24,000-Acre Talisman Darby Property in Wyoming With Estimated Recoverable Reserve of Over 120 Million BOE

Two Prospects Totaling 5,000 Acres and Estimated to Contain 80 Million Barrels of Oil and 716 Billion Cubic Feet of Natural Gas (120 Million BOE) Have Already Been Identified on the Property; Additional Exploration Continues

BILLINGS, MT--(Marketwire - Apr 26, 2011) - UnionTown Energy Inc. (OTCBB: UTOG) is pleased to announce that the Company's offer to purchase the 24,000 acre oil and gas property, formerly owned by Fortuna (US) L.P. (now operating under Talisman Energy USA Inc.), was accepted yesterday.

The property, known as the Darby Block Prospect, is secured with a non-refundable $1,000,000 US deposit, which will be advanced over the next 5 days by the Company against the purchase.

A geologist report obtained from an independent third-party engineering firm has identified two primary prospects covering 5,000 acres within the 24,000 acre property (the "Report"). The combined potential recoverable reserve for both prospects has been estimated at 80 million barrels of oil and 716 billion cubic feet of natural gas, or 120 million Barrels of Oil Equivalent (BOE).

Major oil and gas companies currently engaged in development and production on properties surrounding the Darby Block include Exxon, Shell, Chevron and Amoco. The Darby Block is in a prime location at the leading edge of the Wyoming Thrust Belt, near the giant LaBarge field which is owned by Exxon.

According to the Report, two large oil and gas prospects have already been identified on The Darby Block Property. A prospect is a potential trap which geologists believe may contain hydrocarbons. A significant amount of geological, structural and seismic investigation must first be completed to redefine the potential hydrocarbon drill location from a lead to a prospect. Additional structural leads have also been identified by the Company, and with further work are expected to provide numerous additional prospects.

There is major production along the same structural trend which confirms a working hydrocarbon system. Stacked reservoirs include the Madison, Bighorn, and Nugget which are all known producers.

Prospect One is estimated at 1,940 acres with dry gas in the Madison and Bighorn at a depth of 7,000 ft. to 9,500 ft., and Prospect Two is estimated at 3,860 acres with dry gas in the Madison and Bighorn at a depth of 7,000 ft. to 9,500 ft. and oil in the Nugget at 17,000 ft. The current combined P50 estimated recoverable reserve for both prospects is over 120 million BOE.

In return for $17,000,000 US over the next 12 months, UnionTown will acquire up to a 70% working interest in the Darby Block which carries a 75% Net Revenue Interest (NRI).

UnionTown will pay 100% of the costs to drill and complete the first well on the Prospect One, which will initially entitle UnionTown to an 85% working interest before payout and a 70% working interest after payout on these two prospects, where the vendor and operator will retain a 30% carried working interest thereafter. The closing documents for the acquisition are expected to be finalized over the next two weeks at which time further details will be disclosed.

"This acquisition is a game changer for UnionTown and our shareholders," said Company President and CEO Darren Stevenson. "With in-ground oil reserves prices ranging from $10 to $25 per barrel and the Darby Property's estimated recoverable reserves of 120 million BOE, this acquisition will be a crown jewel in our growing asset portfolio. We are firmly committed to building UnionTown into a significant oil and gas producer that will contribute to American energy independence."

The Talisman Darby Block Property is the third oil and gas property that UnionTown has acquired. UnionTown expects to complete the acquisition of the fourth property, Teton River, in the next 30 days.

About UnionTown Energy Inc.
UnionTown Energy Inc. is focused on the acquisition, exploration, development and production of oil and natural gas properties. Our strategy is to build a portfolio of energy producing assets in known and producing oil and gas fields throughout North America. With the completion of our acquisitions of the Musselshell Property, New Miami Property and the Darby Block Property, we're moving rapidly to bring the first wells to production. We're also in advanced stages of acquisition of other oil and gas properties, including the Teton River, and continue to develop a pipeline of additional potential acquisitions under consideration in the continental USA. For more information about our company, please visit www.UnionTownEnergy.com.

Safe Harbor
Except for historical information contained herein, the matters set forth above may be forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ from those in the forward-looking statements. Words such as "anticipate," "believe," "estimate," "expect," "intend" and similar expressions, as they relate to UnionTown, the potential reserves, production and ability to establish wells on the Musselshell, New Miami Prospect, Darby Block Property, and the Teton River, identify forward-looking statements. Such forward-looking statements are based on the current beliefs of management, as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors such as the nature of business negotiations, the operational details of oil and gas properties, the competitive environment within the industry, the ability of UnionTown to expand its operations, the level of costs incurred in connection with UnionTown's expansion efforts, economic conditions in the industry and UnionTown's financial strength. UnionTown does not undertake any obligation to update such forward-looking statements. Investors are also directed to consider all other risks and uncertainties.

Contact Information

  • Contact
    Patrick Smyth
    Director of Corporate Communications
    UnionTown Energy Inc.
    Phone: (702) 530-3241
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