Eastshore increases year-end reserves by 37%, successfully completes Hanlan Well



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES./

    CALGARY, March 21 /CNW/ - Eastshore Energy Ltd. ("Eastshore" or the
"Company" - TSX Venture: EST.A; EST.B).
    Eastshore Energy Ltd. is pleased to provide information regarding its
year-end 2006 reserves highlights and current field operations.

    EASTSHORE YEAR-END 2006 RESERVES HIGHLIGHTS

    Eastshore's corporate reserves estimates, effective December 31, 2006,
were prepared by the independent engineering firm of GLJ Petroleum Consultants
Ltd. in accordance with the definitions set out under Canadian Securities
Administrators' National Instrument 51-101 Standards of Disclosure for Oil and
Gas Activities. Reserve highlights include:

    
    Reserves at December 31, 2006
    -------------------------------------------------------------------------
                                                 Annual              Annual
                                        MBOE     Change     $PV10    Change
    -------------------------------------------------------------------------
    Proved producing                   1,221        +11%   23,811        +5%
    Total proved                       1,557        +37%   26,341       +13%
    Total proved plus probable         2,039        +37%   33,442       +26%
    -------------------------------------------------------------------------
    Note:  Reserves include working interest and royalty volumes; $PV10
           reserve values are before-tax, without ARTC, present value
           discounted at a rate of 10% per year, with GLJ Jan. 1, 2006 and
           Jan. 1, 2007 forecast prices.
    

    Year-end 2006 reserves are comprised of approximately 63% gas and 37%
liquids on a volume basis, for both total proved and total proved plus
probable reserves.
    Eastshore plans to file its complete reserves disclosure in accordance
with applicable regulatory requirements with or prior to the disclosure of
2006 year-end financial results in late April 2007.
    At year-end 2006, Eastshore held about 27,840 gross (18,466 net) acres of
undeveloped lands valued by the Company at approximately $5.5 million, owned
3-D and 2-D seismic valued by the Company at its cost of approximately
$1.5 million, and estimated its working capital deficiency to be $1.5 million
(subject to audit).
    At year-end 2006, Eastshore had issued and outstanding 34,861,258 Class A
shares and 792,000 Class B shares (convertible into 7.92 million Class A
shares under circumstances prevailing at the date of this news release). Also
at year-end 2006, the Company had 3,040,500 share options outstanding, at
exercise prices ranging from $1.08 to $3.00 per share.

    OPERATIONS

    Hanlan, Alberta
    ---------------

    Successful Stimulation of Hanlan 13-21 Deep Gas Well

    Eastshore recently performed a successful 44-tonne hydraulic fracture
stimulation on its Hanlan 13-21-46-17 W5M deep gas well (60% Eastshore
interest). As previously announced, the 13-21 well encountered two Cardium gas
sections totaling approximately 100 feet of gross pay (60 feet net), and is a
six-mile step out from Eastshore's existing Hanlan producing wells.
    Stabilized test rates over a five-day test period were approximately 230
boepd of sweet gas and 51 degree API condensate (approximately two-thirds raw
gas and one-third wellhead liquids).
    Eastshore plans to place the 13-21 well on production during the second
half of 2007. This tie-in will also provide a production hub in the northern
end of the Hanlan play for the rapid and cost-effective tie-in of future
wells.

    Fracture Stimulation of Existing Hanlan Wells

    The successful stimulation of the 13-21 well is a milestone in
development of Eastshore's liquids-rich deep gas play at Hanlan. For the past
two years, the Company has been limiting its Hanlan completions to no fracture
stimulations at all or only very small "clean-up" fracture stimulations. We
expect to now be able to perform large fracture stimulations on existing and
future wells with the expectation of higher onset and long-term gas production
rates.
    Eastshore is now developing a program for performing similar stimulations
at the currently producing 15-24 and 6-25-45-17W5M wells, in which Eastshore
holds a 41.5% interest. Without the benefit of large stimulations, both of
these wells produced at higher initial rates than the 13-21 well was capable
of before its large stimulation.
    Further completion work on the 60% interest Hanlan 12-34-45-17W5M well
that was drilled at the end of 2006 will be evaluated after this program is
completed.

    Sunchild, Alberta
    -----------------

    Eastshore's multi-zone, deep gas exploration/development well at Sunchild
(20 percent Eastshore interest before payout, 50 percent after payout) has
been drilled to total depth and is expected to be cased.
    This well is close to mid-stream gas gathering infrastructure and,
assuming a successful completion, is expected to be on stream during mid-2007.
Eastshore's farmee in this well has the option to elect to drill another well
under the same terms on an adjacent section.

    Niton, Alberta
    --------------

    Eastshore is planning the implementation of a waterflood of its Niton
Rock Creek light oil production. This procedure will include unitization with
another oil and gas company. The waterflood is scheduled for commencement
during the second half of 2007.
    The well drilled at Niton at the end of 2006 has been completed and
suspended as uneconomic.
    Eastshore plans to drill a 50 percent interest gas well during the second
or third quarter of 2007, offsetting existing gas production.

    2007 Production and Capital Program
    -----------------------------------

    Eastshore plans to maintain a high degree of financial flexibility by
controlling its capital expenditures and keeping debt low relative to cash
flow. First quarter 2007 capital spending is budgeted to between $2.5 and
$3 million and is focused on the operations described above. The Company is
assessing a broad range of opportunities for profitable growth. These include
raising additional capital, property sales and purchases, and corporate
acquisitions or a business combination.
    Eastshore currently produces between 525 to 550 boepd of light oil,
natural gas liquids, and sweet natural gas (about 70 percent gas-weighted)
from its three producing properties in the west central Alberta "W5" corridor.
The Company generally holds high working interests and operates most of its
production.

    Background

    Eastshore is a Canadian junior oil and gas exploration, development, and
production company. The Company's focus is on liquids-rich natural gas and
light oil areas in west-central Alberta.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

    Reader Advisory

    Information provided herein contains forward-looking statements. The
reader is cautioned that assumptions used in the preparation of such
information, which are considered reasonable by Eastshore Energy Ltd. at the
time of preparation, may be proved to be incorrect. Actual results achieved
during the forecast period will vary from the information provided and the
variations may be material. There is no representation by Eastshore that
actual results achieved during the forecast period will be the same in whole
or in part as those forecast.

    BOE Presentation

    The calculations of barrels of oil equivalent ("boe") are based on a
conversion rate of six thousand cubic feet ("mcf") of natural gas to one
barrel ("bbl") of crude oil. Boe's may be misleading, particularly if used in
isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on an energy
equivalency primarily applicable at the burner tip and does not represent a
value equivalency at the wellhead.

    This news release shall not constitute an offer to sell or the
solicitation of an offer to buy the securities in any jurisdiction. The Common
Shares will not be and have not been registered under the United States
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from the registration
requirements.





For further information:

For further information: Eastshore Energy Ltd., Telephone: (403)
232-1150, Facsimile: (403) 232-1466, www.eastshoreenergy.com; Gary W. Burns,
President & Chief Executive Officer; Wende Dummer, Vice-President Finance &
Chief Financial Officer, wdummer@eastshoreenergy.com; Gordon D. Holden,
Vice-President Reserves & Corporate Development, gholden@eastshoreenergy.com

Organization Profile

EASTSHORE ENERGY LTD.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890