Valiant Energy Inc.
TSX : VLE

Valiant Energy Inc.

July 26, 2005 09:00 ET

Valiant Energy Inc. Announces Operations Results

CALGARY, ALBERTA--(CCNMatthews - July 26, 2005) - Valiant Energy Inc. (TSX:VLE) ("Valiant" or the "Company") is pleased to announce an update of operations.

Recent Drilling Results

Valiant, which was created through the Plan of Arrangement between Forte Resources Inc., Thunder Energy Inc. and Mustang Resources Inc., has commenced a drilling program on lands in its core areas of Niton and Leaman, Alberta, West Central, Alberta, and the Peace River Arch area, Alberta. Results for wells drilled to date are 2.0 gross (1.49 net) oil wells, 2.0 (0.5 net) gas wells and 1.0 (0.25 net) dry and abandoned wells, as follows:

Leaman - Valiant recently cased the Leaman 7-31-57-9W5 well, which is an indicated Paleozoic oil/ gas development well. Valiant has a 94 % working interest in this well. To date, five wells have been drilled and cased in a newly defined Paleozoic medium gravity oil pool at Leaman, in which Valiant has working interests ranging from 94 - 100 %. Initial test rates for the wells range from 200 - 300 boepd each. The first well, 02/9-36-56-11W5, commenced production at rates from 150 - 200 boepd gross. After an initial four month production period, the provincial allowable production rate for each well will be restricted to 50 bopd. However, an engineering study of pool depletion strategies is underway to assess the potential for increasing well production rates above the 50 bopd allowable rate to rates closer to each well's productivity as well as to assess the optimum method of maximizing pool recoveries. Valiant has also participated in an indicated Nordegg gas well ( 33 % W.I.) at 8-2-58-10W5 in the Leaman area.

Niton - Valiant has drilled and cased an indicated Rock Creek gas well at 7-8-56-11W5, in which the Company has a 55 % working interest.

Peace River Arch - Valiant participated as to a 25 % working interest in a dry hole at Rycroft 6-2-77-6W6.

West Central, Alberta - Valiant participated as to a 25 % working interest in an indicated dual zone Cretaceous gas development well. The first zone tested natural gas on a short-term production test at rates up to 3.5 mmcfd. This is the second well drilled on the property in which Valiant and its partner have an interest. The first well (50 % W.I.) also was a dual zone gas well with combined test rates of 3.0 mmcfd. Tie-in of these wells is expected to occur over the next three months.

Current Activity

Niton - Valiant has commenced drilling operations at 11-9-56-11W5 (55 % W.I.), targeting the Rock Creek formation.

Leaman - In early August Valiant will commence a four well Paleozoic oil pool development drilling program with working interests in the wells ranging from 94% - 100%. Currently, Valiant is completing construction of the central battery and gas gathering system for this pool to permit first gas sales, anticipated at 0.8 mmcfd (Valiant share) in early August.

Peace River Arch - At Webster, Valiant has commenced tie-in of the 02/4-8-74-5W6 well, with first production of 2.0 mmcfd of natural gas expected in early August. Valiant has a 55 % working interest in the well.

The current corporate production rate is approximately 500 boepd before royalties.

Capital Expenditures, Bank Borrowing Facility, Corporate

Following approval of the 2005 budget at a recent meeting of the Board of Directors the Company has set its capital expenditure program for 2005 at $15.0 million, comprised of $8.0 million for drilling and completion, $5.4 million for facilities and workovers, and $1.6 million for land, seismic and capitalized G&A.

The Company also announces that it has entered into a banking arrangement with its primary lender whereby a credit limit of $6.0 million has been established with provision for increases up to $8.8 million, subject to certain conditions having been met.

Valiant has a full complement of technical and support staff in place to manage expected growth. Officers and directors are:



R. Bruce Hammond President and C.O.O. W. Peter Comber Director
Doug N. Baker C.F.O. Greg S. Fletcher Director
Christine Robertson V.P. Engineering David V. Richards Director
Tom MacKay Chairman and C.E.O. Glen Roane Director


FORWARD LOOKING STATEMENTS

This press release may contain forward-looking statements including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry (eg. Operational risks in development, exploration and production: delays or changes in plans with respect to exploration or development projects or capital expenditures: the uncertainty of reserve estimates; the uncertainty of estimates an projections relating tot production, costs and expenses and health, safety and environmental risks), commodity price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect the Company's operations or financial results are included in Valiant's reports on file with Canadian regulatory authorities.

Valiant is a new Calgary based oil and gas exploration and production company created as part of the Plan of Arrangement of Forte Resources Inc. with Thunder Energy Inc. and Mustang Resources Inc. Common shares outstanding are 16. 2 million basic and 17.8 million fully diluted. Valiant's shares trade on the Toronto Stock Exchange under the trading symbol "VLE".

This news release may contain forward-looking statements including expectations of future production, cash flow and earnings. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated. These risks include, but are not limited to: the risks associated with the oil and gas industry. (e.g. operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projects relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from the potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Additional information on these and other factors that could affect Forte's operations or financial results are included in Forte's reports on file with Canadian securities regulatory authorities.

Contact Information

  • Valiant Energy Inc.
    Douglas N. Baker
    Chief Financial Officer
    (403) 237-5163
    (403) 237-5256 (FAX)
    Email: dbaker@valiantenergy.ca
    Website: www.valiantenergy.ca
    or
    Valiant Energy Inc.
    2400, 500 - 4th Avenue S.W.
    Calgary, Alberta T2P 2V6