Cequence Energy Enters Into Agreements to Acquire Oil and Gas Producing Properties and Related Assets



    
    /NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
    UNITED STATES/
    

    CALGARY, Aug. 18 /CNW/ - Cequence Energy Ltd., formerly Sabretooth Energy
Ltd., ("Cequence" or the "Company") (TSX: "CQE"; formerly "SAB") is pleased to
announce that it has entered into two separate purchase and sale agreements
(the "Purchase and Sale Agreements"), one with a subsidiary of a major
publicly traded oil and gas company and one with a private oil and gas company
(collectively referred to as the "Vendors") providing for the acquisition (the
"Acquisitions") by the Company of certain oil and gas producing properties
(the "Properties") for an aggregate purchase price of approximately $19
million in cash, subject to adjustment. The Acquisitions are expected to close
at the end of August 2009 and the end of September 2009 with effective dates
of June 1, 2009 and August 1, 2009, respectively.
    The Properties are concentrated in the Peace River Arch area of northwest
Alberta and, in the opinion of management, are an excellent complement to the
existing Cequence properties. The Properties include various facility and
pipeline working interests with the majority of production being operated.
    Anticipated production from the Properties is estimated to be
approximately 850 boe/d, comprised of 4.6 mmcf per day of high heat content
natural gas and 85 barrels per day of oil and natural gas liquids. In
addition, the Properties contain approximately 31,000 net acres of undeveloped
land.
    Based on independent reserves evaluations of the Properties, Cequence's
total proved reserves are expected to increase by approximately 1,650 mboe and
proved plus probable reserves are expected to increase by approximately 2,841
mboe.
    Upon closing of the Acquisitions, Cequence expects to have average daily
production volumes of approximately 2,150 boed (6:1), comprised of
approximately 11.0 mmcf/d of natural gas and 266 bbls/d of oil and natural gas
liquids. Expected daily production volumes take into account the planned
shut-in of approximately 150 boe/d in mid-August due to low natural gas
prices.
    Cequence expects to finance the Acquisitions through its existing working
capital. Completion of the Acquisitions is subject to certain customary
closing conditions.

    
    The key attributes of the Acquisitions are:

        -  Anticipated combined production of approximately 850 boe/d;

        -  48 net sections of undeveloped land;

        -  Numerous development drilling locations; and

        -  Operating costs of approximately $11 per boe.

    Acquisition Metrics

    Based on the above, and excluding undeveloped land value of $1.55 million,
the acquisition metrics are as follows:

        -  Production

           -  $22,353 per producing boe based on 850 boe/d

        -  Reserves (including future capital)

           -  $8.25 per proven plus probable boe; and
           -  $12.27 per proved boe.
    

    Cequence Energy Ltd. is a publicly traded Canadian energy company
involved in the exploration, development and production of natural gas and
crude oil in western Canada.

    Forward Looking Information

    Certain information included in this press release constitutes
forward-looking information under applicable securities legislation. Such
forward-looking information is provided for the purpose of providing
information about management's current expectations and plans relating to the
future. Readers are cautioned that reliance on such information may not be
appropriate for other purposes, such as making investment decisions.
Forward-looking information typically contains statements with words such as
"anticipate", "believe", "expect", "plan", "intend", "estimate", "propose",
"project" or similar words suggesting future outcomes or statements regarding
an outlook. Forward-looking information in this press release may include, but
is not limited to, information with respect to: business strategy and
objectives; information relating to the Acquisitions and the benefits thereof;
development, exploration, acquisition and disposition plans and the timing
thereof; reserve quantities and the discounted present value of future net
cash flows from such reserves including production from the Properties; future
production levels. Forward-looking information is based on a number of factors
and assumptions which have been used to develop such information but which may
prove to be incorrect. Although the Company believes that the expectations
reflected in such forward-looking information is reasonable, undue reliance
should not be placed on forward-looking information because the Company can
give no assurance that such expectations will prove to be correct. In addition
to other factors and assumptions which may be identified in this press
release, assumptions have been made regarding, among other things: the impact
of increasing competition; the ability to complete the Acquisitions; timing
for completing the Acquisitions; the timely receipt of any required regulatory
approvals; the ability of the Company to obtain qualified staff, equipment and
services in a timely and cost efficient manner; the ability of the operator of
the projects which the Company has an interest in to operate the field in a
safe, efficient and effective manner; the ability of the Company to obtain
financing on acceptable terms including any financing required to complete the
Acquisitions; field production rates and decline rates; the ability to replace
and expand oil and natural gas reserves through acquisition, development of
exploration; the timing and costs of pipeline, storage and facility
construction and expansion and the ability of the Company to secure adequate
product transportation; future oil and natural gas prices; currency, exchange
and interest rates; the regulatory framework regarding royalties, taxes and
environmental matters; and the ability of the Company to successfully market
its oil and natural gas products. Readers are cautioned that the foregoing
list is not exhaustive of all factors and assumptions which have been used.
    Forward-looking information is based on current expectations, estimates
and projections that involve a number of risks and uncertainties which could
cause actual results to differ materially from those anticipated by the
Company and described in the forward-looking information. The material risk
factors affecting the Company and its business are contained in the Company's
Annual Information Form which is available under the Company's issuer profile
on SEDAR at www.sedar.com.
    The forward-looking information contained in this press release is made
as of the date hereof and the Company undertakes no obligation to update
publicly or revise any forward-looking information, whether as a result of new
information, future events or otherwise, unless required by applicable
securities laws. The forward looking information contained in this press
release is expressly qualified by this cautionary statement.

    Additional Advisories

    Boes are presented on the basis of one Boe for six Mcf of natural gas.
Disclosure provided herein in respect of Boes may be misleading, particularly
if used in isolation. A Boe conversion ratio of 6 Mcf:1 Bbl is based on an
energy equivalency conversion method primarily applicable at the burner tip
and does not represent a value equivalency at the wellhead.

    
    The Toronto Stock Exchange has neither approved nor disapproved the
    contents of this press release.
    

    %SEDAR: 00023788E




For further information:

For further information: Howard Crone, Chief Executive Officer, (403)
229-3050, hcrone@cequence-energy.com or, David Gillis, Chief Financial
Officer, (403) 229-3050, dgillis@cequence-energy.com


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