Drift Lake Resources Announces Farm-In Agreement With Canacol Energy Ltd To Acquire 30% Interest In Two Blocks, Cor-39 And Cor-11 (272,021 Acres), In The Upper Magdalena Basin, Colombia

TORONTO, Sept. 15, 2011 /CNW/ - Drift Lake Resources Inc. (TSX-V: DLA) ("Drift Lake" or the "Company") announces today that Sintana Energy Inc. ("Sintana"), the Company's South America Operations Office located in Bogatá and existing under the laws of Colombia, has entered into an agreement with Canacol Energy Colombia S.A., (a subsidiary of Canacol Energy Ltd. - TSX: CNE) to farm-in for an undivided 30% working interest in the COR-11 and COR-39 blocks in the Upper Magdalena Basin, Colombia.

COR-39 and COR-11 are located in the Guando trend of Colombia's Upper Magdalena Basin.  Guando is one of the last 100 million barrel fields to be found in Colombia with some favorable world-class attributes that have not yet been adequately pursued in the trend.  Guando was discovered in 2000 and contains medium-gravity oil with a hydrocarbon column over 2,100 feet thick and a NET reservoir over 1,000 feet thick.  Recoverable reserve estimates are still increasing above 126 million barrels due to improved water flood programs.

COR-39 and COR-11 are 60 kilometers apart (north-south direction) on either side of Guando Field: COR-39 is 20 kms north of Guando and COR-11 is 40 kms south of Guando. COR-39 and COR-11 Blocks were awarded to Canacol in Colombia's 2010 Bid Round and have positive contract terms and minimal X-factors of only 1% each.  These Blocks represent sizeable exploration tracts, consisting of 95,106 and 176,915 acres, respectively, for a total of 272,021 acres (1,100 square kilometers).  The COR-39 and COR-11 Blocks are located 50 and 90 kilometers, respectively, southwest of the capital city of Bogotá and are close to established infrastructure and local markets.  COR-39 is adjacent and south of the Talora Block, Sintana Energy's first acquisition in Colombia. Additional details on the 108,336 acre Talora Block and surrounding area production can be found on the Company's website at www.driftlakeresources.com

Sintana Strategy - Undervalued Play Fairways

Sintana's strategy is to build a solid acreage position in undervalued play fairways particularly in terms of the ultimate reserve potential, proximity to local and international markets and ready access to segments of the national pipeline system with available capacity (25,000 BOPD).  The Guando region is currently producing over 30,000 BOPD of medium and light gravity oil and contains over 200 MMBO of discovered reserves. Sintana believes the Upper Cretaceous is a virtually unexplored opportunity with significant potential due to its 1,000 feet of net reservoir thickness and equally thick oil column. While the "Lower Cretaceous" has a higher reservoir quality risk than the "Upper Cretaceous," mostly due to a very limited number of well penetrations, the current technical view for this section and its reservoir distribution is that it is virtually untested over most of the region. The Company believes the "Lower Cretaceous" merits a comprehensive exploration program, especially since this same section was long over-looked in the southern part of the basin and eventually became one of the most prolific reservoirs, including in the basin's largest field to date, the San Francisco Field with around 200 million barrels of medium-gravity oil at 3,500-foot depths.

Sintana's approach is to establish a series of contiguous blocks along specific play fairways in order to explore and produce in a more systematic way as opposed to having single blocks in widely diverse areas. In the northern Upper Magdalena basin, Sintana's has selected areas which have excellent nearby field analogs with a balanced set of prospects, some of them "close-in" and ready to drill.  The objective is to shorten the cycle-times to establish positive cash flow.  These two COR blocks provide an ideal diversification of prospect types, resource range and risk profile.  Prospects range from well-defined conventional low risk types in COR-39 to higher risk and higher reward prospects with significant upside in COR-11.

Permits have been approved and Canacol Energy Colombia S.A. plans to acquire 120 kilometers of 2D seismic in COR-39 and 155 kilometers of 2D seismic in COR-11. This is expected to be followed by interpretation of the seismic data and then with an aggressive drilling program of at least 2 wells in COR-39 and 1 well in COR-1 during 2012.

Under the terms of the farm-in agreement, the Company will earn an undivided 30% working interest in the COR-39 and COR-11 Blocks by paying 60% of the seismic and exploration costs related to the drilling of the first three wells. The total estimated net cost to Sintana to complete the earn-in exploration phase is approximately US$28 million. This transaction remains subject to receipt of all applicable approvals, including those of the regulatory and governmental authorities in Colombia and the TSX Venture Exchange.

The CEO of Drift Lake, Doug Manner, stated, "Acquiring an interest in the COR-39 and COR-11 Blocks demonstrates our commitment to executing our acquisition and exploration strategy in the Magdelena Basins in Colombia.

The COR Blocks provide the Company access to large structures that are on trend with numerous productive fields in the Basin.  These opportunities are consistent with our intent to explore for, develop and produce superior quality assets with significant reserve potential.  As demonstrated by this transaction, Sintana is aggressively pursuing near term drilling opportunities, early stage production and establishment of positive cash flow. Business development activities aimed at acquiring interests in additional high impact opportunities are ongoing."

(Reference Note - All reserve estimates contained in this press release are from industry-published sources, including the Wood MacKenzie database)

ABOUT DRIFT LAKE RESOURCES AND SINTANA ENERGY

Drift Lake Resources thru its South America subsidiary, Sintana, is primarily engaged in petroleum and natural gas exploration and development activities in Colombia, Peru and Paraguay. The Company's exploration strategy is to acquire, explore, develop and produce superior quality assets with significant reserve potential.  The Company currently holds a 25% working interest in 175,000 acres in the Bayovar Block XXVII in the Sechura Basin, Peru, a 30% interest in 108,336 acres in the Talora Block and a 30% interest in 272,021 acres in the COR-39 & COR-11 Blocks in the Magdalena Basin, Colombia. The Company continues to evaluate a portfolio of other exploration opportunities in South America.

On behalf of Drift Lake Resources Inc.

"Doug Manner"
Chief Executive Officer

Forward-Looking Statement

This news release includes forward-looking statements related to the expected occurrences in relation to the properties identified. A multitude of factors can cause actual events to differ significantly from any anticipated development and although Drift Lake believes that the expectations represented by such forward-looking statements are reasonable; there can be no assurance that such expectations will be realized. These forward looking statements are based upon assumptions that Drift Lake has made concerning the oil and gas industry in Colombia, the reliability of available data regarding the properties and increasing demand for oil and gas. Risk factors which may cause actual results to differ from those anticipated in such forward looking statements include but are limited to, the uncertainty of conducting operations under a foreign regime, the uncertainty of obtaining all applicable regulatory approvals, the availability of labour and equipment, the fluctuating prices of oil and gas, the availability of financing and Drift Lake's dependence upon other participants in the property areas. Neither Drift Lake nor any of its subsidiaries nor any of its officers or employees guarantee that the assumptions underlying such forward-looking statements are free from errors, nor do any of the foregoing accept any responsibility for the future accuracy of the opinions expressed in this document or the actual occurrence of the forecasted developments.

Although the Company believes that the expectations represented by the forward-looking statements contained herein are reasonable, undue reliance should not be placed on the forward-looking statements as there can be no assurance that such expectations will be realized. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. This press release does not constitute an offer to sell or a solicitation to buy any of the securities of Drift Lake Resources in the United States.

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

For further information:

For further information please visit our website at www.driftlakeresources.com or email us at info@driftlakeresources.com

Corporate Contact:
Drift Lake Resources Inc.
Douglas Manner
Chief Executive Officer
Tel: 832.279.4913     
Operations Contact:
Sintana Energy Inc.
Phil de Gruyter
V.P. Exploration and S.A. Manager
Tel: 011.571.214.8365

 

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