CALGARY, March 31 /CNW/ - Eagle Rock Exploration Ltd. ("Eagle Rock" or
the "Company") (TSXV:ERX) has entered into a binding letter agreement with an
arm's-length party for the sale of its low working interest (approximately one
third), non-operated assets in the fully developed field at Antelope Lake,
southwest Saskatchewan in exchange for $6,880,000 cash and 100% working
interest in 525 net acres of undeveloped land. The land acquisition will
increase Eagle Rock's total undeveloped land in SW Saskatchewan to 2,365 net
acres from 1,840 net acres.
Average daily production net to Eagle Rock from this field for March 2008
is estimated to be 135 bbls/d. Production has declined from 241 bbl/d in
December 2007 due to higher water cuts and curtailments ordered by the
regulator because of production over allowable limits in the past. The higher
water cuts increase Eagle Rock's processing costs as Eagle Rock does not have
a working interest in the facilities.
Closing of the disposition is subject to normal industry conditions and
The combination of the sale proceeds with the net revenue received to
March 31, 2008 returns 212% of the original investment in exploration and
development cost in the Antelope Lake property since the discovery well was
announced May 1, 2006.
"As a result of this transaction, Eagle Rock now operates virtually all
of its properties, and these funds will enable us to accelerate our drilling
program in southern Alberta and give us additional financial & operational
flexibility. This divesture is consistent with the Company's strategic focus
on 100% owned and operated land and facilities" said Jim Silye, President &
CEO of Eagle Rock.
About Eagle Rock
Eagle Rock is a publicly traded energy company involved in the
exploration and development of low to medium risk oil and gas properties in
Western Canada. Eagle Rock's common shares trade on the TSX Venture Exchange
under the symbol "ERX".
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
This press release includes forward-looking statements and assumptions
respecting Eagle Rock's strategies, future operations, expected financial
results, financial sources, commodity prices, costs of production and quantum
of oil and natural gas reserves and discusses certain issues, risks and
uncertainties that can be expected to impact on any of such matters. By their
nature, forward-looking statements are subject to numerous risks and
uncertainties that can significantly affect future results. Actual future
results may differ materially from those assumed or described in such
forward-looking statements as a result of the impact of issues, risks and
uncertainties whether described herein or not, which Eagle Rock may not be
able to control. The reader is therefore cautioned not to place undue reliance
on such forward-looking statements. The forward-looking statements contained
in this news release are made as of the date hereof and Eagle Rock undertakes
no obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable securities laws. The forward-looking statements
contained in this news release are expressly qualified by this cautionary
statement. In addition, the term BOE or BOE's may be misleading, particularly
if used in isolation. A BOE (barrel of oil equivalent) conversion ratio of 6
Mcf per one (1) BOE is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
For further information:
For further information: Jim Silye, President and Chief Executive
Officer, Tel: (403) 269-4040, Fax: (403) 261-1978, E-mail: email@example.com,