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TSX V Trading Symbol: SWE
CALGARY, Feb. 25, 2013 /CNW/ - SilverWillow Energy Corporation
("SilverWillow" or the "Corporation") is pleased to announce an
increase to its estimate of Discovered Petroleum Initially-In-Place and
the assignment of Contingent Resources following an independent
evaluation of the bitumen resources attributable to its oil sands
property, the Audet Lands, located approximately 110 km northeast of
Fort McMurray, Alberta.
"We are pleased to advise that the estimate of Discovered Petroleum
Initially-In-Place has increased from 1,689.6 million barrels to
1,845.9 million barrels following Sproule's review of the results from
the 2012 drilling program", announced Howard Lutley, President and
Chief Executive Officer of SilverWillow. "Furthermore, of the above
Discovered Resources, Sproule has assigned a best estimate of
Contingent Resources to the Audet Lands of 68.4 million barrels of
recoverable bitumen in place. This independent confirmation of the
potential within the Audet Lands gives us added confidence as we
advance the project."
Sproule Unconventional Limited ("Sproule") prepared the independent
evaluation of the bitumen resources of the Audet Lands in the Athabasca
Oil Sands region of Alberta for SilverWillow effective December 31,
2012. Sproule's work on the Audet Lands included a geological
evaluation and an engineering review of the work conducted by
SilverWillow's independent consultants with respect to caprock
integrity tests and reservoir simulation studies to determine the
potential for production of bitumen using Steam Assisted Gravity
Drainage ("SAGD") methods.
SilverWillow is currently engaged in the engineering design of a pilot
and a commercial project. It is, therefore, premature to evaluate the
economic viability of the project at this time, and the economic status
of the contingent resources assigned to SilverWillow's Audet Lands is
In early 2012 SilverBirch Energy Corporation ("SilverBirch"), the prior
holder of the Audet Lands, completed an exploration drilling program
consisting of 38 core holes, 2D seismic, mini-frac tests and
geo-mechanical testing. The 2012 program was a follow-up to the 34
core holes drilled on the Audet Lands in 2011 by SilverBirch. These
leases, which are now owned 100% by SilverWillow, are located 110 km
northeast of Fort McMurray, and approximately 40 km north of Cenovus
Energy Inc.'s proposed Telephone Lake project.
During 2012, SilverWillow engaged geo-mechanical engineering and
reservoir engineering consultants to assist the Corporation in the
assessment of the Audet Lands for the production of bitumen by SAGD
methods. The results of the technical work by the consultants indicate
that the reservoir and caprock properties will allow production by SAGD
methods at appropriate pressures without compromising the integrity of
the caprock. Additional studies will be undertaken to properly assess
the areal extent of the caprock properties and the requirement for a
small-scale pilot to demonstrate the integrity of the caprock under
operating conditions. SilverWillow will acquire additional caprock
data in its 2013 exploration program and is in the process of
determining the cost of a small caprock pilot test for the Audet Lands.
This will provide important field data regarding performance of the
caprock, and will assist in the design of SilverWillow's proposed
12,000 barrel per day SAGD development project.
SilverWillow Energy Corporation
Contingent Bitumen Resources1
as of December 31, 2012
1The term "contingent resources" is taken from the Canadian Oil and Gas
Evaluation Handbook ("COGEH") as published by the Society of Petroleum
Evaluation Engineers (Calgary Chapter). The volumes listed in the
chart above entitled, "Contingent Bitumen Resources" refer to
potentially recoverable volumes of bitumen resources. The volumes of
contingent bitumen resources in the above chart are presented in
millions of barrels at stock tank conditions. There is no certainty
that it will be commercially viable to produce any portion of the
contingent bitumen resources.
SilverWillow has updated its investor presentation to reflect this
announcement. The presentation is posted on SilverWillow's website at www.swenergy.ca.
The preparation and disclosure of the reported resource estimates are
the responsibility of SilverWillow's management and require approval by
the Corporation's Reserves and HSE Committee and Board of Directors.
Sproule's responsibility is to express an opinion on the contingent
bitumen resources based on the data provided by management. Sproule
carried out the evaluation and review in accordance with standards
established by National Instrument 51-101 Standards of Disclosure for
Oil and Gas Activities. These standards require that the contingent
resources estimates be prepared in accordance with COGEH.
Discovered Petroleum Initially-In-Place (equivalent to Discovered
Resources) is defined in COGEH as that quantity of petroleum that is
estimated, as of a given date, to be contained in known accumulations
prior to production. The recoverable portion of discovered petroleum
initially-in-place includes production, reserves, and contingent
resources; the remainder is unrecoverable.
Contingent Resources are defined in COGEH as those quantities of
petroleum estimated, as of a given date, to be potentially recoverable
from known accumulations using established technology or technology
under development, but which are not currently considered to be
commercially recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal,
environmental, political and regulatory matters or a lack of markets.
It is also appropriate to classify as ''contingent resources'' the
estimated discovered recoverable quantities associated with a project
in the early project stage.
With respect to the Contingent Resources associated with SilverWillow's
Audet Lands, the contingencies which prevent the classification of
these resources as reserves are as follows: the need for a pilot to
verify the effectiveness of the McMurray Formation shales as caprock
for steam containment during the SAGD operation; the absence of
regulatory approvals for future commercial development; the absence of
a firm commercial development plan; and the uncertainty of funding
approval for commercial developments.
Contingent Resources do not constitute and should not be confused with
reserves. There is no certainty that it will be commercially viable to
produce any portion of the contingent resources on any of the above
For further information including risk factors, please see
SilverWillow's Management Discussion and Analysis for the period ended
September 30, 2012 which was filed on SEDAR at www.sedar.com and the Corporation's website at www.swenergy.ca.
About SilverWillow Energy
SilverWillow Energy Corporation is a Calgary, Alberta based
pre-production oil sands company with a portfolio of exploration leases
in Canada's Athabasca oil sands. To learn more, please visit www.swenergy.ca.
FORWARD-LOOKING INFORMATION: This news release contains "forward-looking information" within the
meaning of applicable securities laws. Forward-looking information is
frequently characterized by words such as "plan", "expect", "project",
"intend", "believe", "anticipate", "estimate" and other similar words,
or statements that certain events or conditions "may" or "will" occur.
The forward-looking information in this news release relates, but is
not limited to, statements with respect to the Corporation's plans to
conduct additional studies and exploration on the Audet Lands, the
development of a proposed 12,000 barrel per day SAGD project. In
addition information relating to "resources" is forward-looking
information, as it involves the implied assessment, based on estimates
and assumptions, that the resources described exist in the quantities
predicted or estimated, and can be profitably produced in the future.
The forward-looking information set out in this news release, is based
on certain expectations and assumptions regarding, among other things,
the exploration and development of the Audet Lands; the ability of the
Corporation to obtain required regulatory approval for the development
of the Audet Lands; the geography of the areas in which SilverWillow
will be exploring; and the sufficiency of budgeted capital expenditures
in carrying out planned activities. These expectations and assumptions
are based on certain factors and events that are not within the control
of SilverWillow and there is no assurance they will prove to be
Forward-looking information is subject to known and unknown risks and
uncertainties and other factors which may cause actual results, levels
of activity and achievements to differ materially from those expressed
or implied in such forward-looking information. Such risks,
uncertainties and factors include, among others, the risk that the
regulatory approvals in respect of the Audet Project will not be
submitted in the timeframe or on the terms expected or at all; risks
relating to the early stage of development of SilverWillow and the
Audet Lands; and the general risks associated with exploring for,
developing and producing bitumen. In addition, there are numerous
uncertainties inherent in estimating bitumen, including many factors
beyond the Corporation's control, and no assurance can be given that
the indicated level of bitumen or the recovery thereof will be
realized. In general, estimates of bitumen are based upon a number of
factors and assumptions made as of the date on which the resource
estimates were determined, such as geological and engineering
estimates, which have inherent uncertainties. Additional risks
relating to the business and operations of SilverWillow are set forth
in the Corporation's TSX Venture Exchange Listing Application and in
its most recent Management's Discussion and Analysis, which are filed
under the Corporation's profile on SEDAR at www.sedar.com.
SilverWillow undertakes no obligation to update forward-looking
information if circumstances or management's estimates or opinions
should change except as required by law. The reader is cautioned not
to place undue reliance on forward looking information.
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
SOURCE: SilverWillow Energy Corporation
For further information:
please contact Howard J. Lutley, President and Chief Executive Officer, at (403) 538-7030