EXALL ENERGY UPDATES Q1 OPERATIONS

CALGARY, May 5 /CNW Telbec/ - Exall Energy Corporation (TSX:EE) ("Exall" or the "Company") is pleased to update shareholders on Q1 operations:

HIGHLIGHTS:

  • Four wells were drilled by Exall in the Marten Mountain area in Q1
  • Two wells completed as oilwells producing at a combined rate of 430 BOEPD (310 BOEPD net)
  • Completion and drilling operations have been suspended in the area through spring break-up
  • Two 3D seismic programs in the Mitsue area were completed in Q1
  • Preliminary interpretation has indicated up to 14 potential drilling locations based on the 3D seismic
  • Enhanced recovery application has been submitted to the ERCB for the southerly B Sand trend
  • Treater and Vapour Recovery units have been installed and are operational
  • Exall has an interest in 17,920 acres (13,220 acres net) in the greater Mitsue area
  • 35-40 drilling locations in the greater Mitsue area, fourteen wells planned to be drilled through the end of 2011 and six more after freeze-up
  • Total production for Exall is currently 1100 BOEPD with 750 BOEPD shut in
  • Glen Kerr, Vice President of Operations has been appointed Chief Operating Officer, and Janet MacKenzie, Manager of Geological Operations has been appointed Vice President of Exploration

Four wells were drilled by Exall in the Marten Mountain area from December 2010 through March 31, 2011. Two wells have been completed as oilwells and are producing at a combined rate of 430 BOEPD (310 BOEPD net) through the Company-owned Marten Mountain pipeline and facilities. Two wells were cased as potential oilwells. Completion operations on a well drilled in Q4 2010 were suspended due to a lack of completion cementing services available in Q1. Completion and drilling operations have been suspended in the area through spring break-up. It is anticipated that operations will recommence in mid-June due to the late date of the start of breakup.

Two 3D seismic programs planned by Exall in the Mitsue area were completed in Q1. The preliminary interpretation has indicated up to 14 potential drilling locations based on the seismic program. Two wells are in planning stages to be drilled in Q2-Q3 to test the validity of the interpretation. Pending results additional wells may be added to the current drilling program.

A waterflood enhanced recovery application has been submitted to the ERCB for the southerly sand trend. Four wells in the trend were included in the application which is to include three producers and one injection well, as well as a saline water source well.

Exall has also completed the bulk of facility upgrades planned for the first quarter of 2011. Treater and Vapour Recovery units have been installed in conjunction with the main battery site and are operational. The compressor installed in Q4 of last year is to be upgraded to handle additional gas associated with anticipated production increases through 2011. Electrification of the Company's facilities continues with anticipated completion in late May.

Additional land interests were acquired by Exall in the Mitsue area via Crown land sales and farmin through Q1of 2011. Exall now has an interest in 17,920 acres (13,220 acres net) in the greater Mitsue area. The Company has an inventory of 35-40 drilling locations in the greater Mitsue area. Plans are under way for the drilling of fourteen wells through the end of 2011 with six additional after freeze-up. Two drilling rigs are currently under contract to Exall including one through the winter 2011-12, which will facilitate the planned drilling program.

Total production for Exall is currently 1100 BOEPD. Two wells in the Marten Mountain B Sand trend are shut in to retire over-production. One well will come on in June and the other in July adding approximately 200 BOEPD net production under allowable and 750 BOEPD once waterflood approval is granted. Production is below projections due to the delay in attaining approval for higher production rates from the new water flood project as well as late breakup delaying completion and drilling operations in the Company's core area.

Exall is pleased to announce that Glen Kerr, Vice President of Operations has been appointed to the position of Chief Operating Officer, and Janet MacKenzie, Manager of Geological Operations has been appointed Vice President of Exploration. "The appointments reflect the contributions Glen and Janet have made to the growth of Exall and their expanding responsibilities as the Company continues on an aggressive growth plan into the future" commented Roger Dueck, recently appointed Chief Executive Officer of Exall.

About Exall
Exall is a junior oil and gas company active in its business of oil and gas exploration, development and production from its properties in Alberta and Texas. Exall is currently developing a new oil discovery in north-central Alberta.

Exall has 61,738,854 common shares outstanding. The Company's common shares are listed on the Toronto Stock Exchange under the trading symbol EE.

Reader Advisory
This news release contains forward-looking statements, which are subject to certain risks, uncertainties and assumptions, including the forward-looking statements relating to the closing of the offering, the use of proceeds from the Offering, along with those relating to results of operations and financial condition, capital spending, financing sources, commodity prices and costs of production. By their nature, forward-looking statements are subject to numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, actual results may differ materially from those predicted. A number of factors could cause actual results to differ materially from the results discussed in such statements, and there is no assurance that actual results will be consistent with them. Such factors include fluctuating commodity prices, capital spending and costs of production, and other factors described in the Company's most recent Annual Information Form under the heading "Risk Factors" which has been filed electronically by means of the System for Electronic Document Analysis and Retrieval ("SEDAR") located at www.sedar.com. Such forward-looking statements are made as at the date of this news release, and the Company assumes no obligation to update or revise them, either publicly or otherwise, to reflect new events, information or circumstances, except as may be required under applicable securities law.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

For the purposes of calculating unit costs, natural gas has been converted to a barrel of oil equivalent (boe) using 6,000 cubic feet equal to one barrel (6:1), unless otherwise stated. The boe conversion ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion method and does not represent a value equivalency; therefore boe may be misleading if used in isolation. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities.

SOURCE Exall Energy Corporation

For further information:

Exall Energy Corporation  
Frank S. Rebeyka
Vice Chairman
Tel: (403) 815-6637
Roger N. Dueck
President & CEO
Tel: (403) 237-7820
info@exall.com

Please visit Exall Energy's website at: www.exall.com.

Renmark Financial Communications Inc.
Maurice Dagenais: mdagenais@renmarkfinancial.com
Florence Liberski : fliberski@renmarkfinancial.com
Tel.: (514) 939-3989 or (416) 644-2020
www.renmarkfinancial.com

 

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Exall Energy Corporation

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