ProspEx Announces Closing of Disposition of Medallion Assets



    CALGARY, June 1 /CNW/ - ProspEx Resources Ltd. ("ProspEx" or the
"Company") today announced that it has closed the previously announced sale of
assets in the Medallion area. The consideration paid to ProspEx was $28.0
million, prior to closing adjustments. The disposition has an effective date
of January 1, 2009. The key attributes of this asset disposition are as
follows:

    
    -   The Medallion assets consist of 179 (115 net) producing wells with
        production (as of the effective date) of approximately 750 barrels of
        oil equivalent ("boe") per day, along with associated gas gathering
        and field compression facilities.
    -   The reserves associated with the assets to be acquired were evaluated
        on behalf of ProspEx by GLJ Petroleum Consultants Ltd. ("GLJ")
        effective December 31, 2008. These reserves were estimated to be:
           -  Proved Developed Producing Reserves - 1,495 thousand boe
              ("mboe")
           -  Total Proved Reserves - 2,348 mboe
           -  Proved plus Probable Producing Reserves - 1,889 mboe
           -  Total Proved plus Probable Reserves - 3,541 mboe
    

    This disposition should provide ProspEx with increased financial
flexibility to pursue the Company's inventory of repeatable drilling projects,
and to capture new prospect opportunities at a time when ProspEx believes that
new prospect opportunities can be captured at lower than historical costs.
    The disposition is expected to further consolidate ProspEx's asset base
around the core areas of West Central Alberta and the Deep Basin, where the
Company has allocated the majority of its recent capital spending, and
achieved its production growth over the past four years.
    ProspEx Resources Ltd. is a Calgary-based junior oil and gas company
focused on exploration for natural gas in the Western Canadian Sedimentary
Basin.

    Reader's Advisory

    Certain information contained in this press release constitutes
forward-looking information or statements including, without limitation,
information and statements respecting: anticipated cash flow, capital
expenditures, production forecasts, production additions and deletions,
reserves and resources additions and deletions, additions to and deletions
from the Company's historical and future capital programs, acquisitions or
dispositions, operating expenses, G&A, royalties, expected timing of the
tie-in of wells, expected timing of the receipt of regulatory approvals and
expected timing of the completion of facilities projects.
    Statements relating to "reserves" and "resources" are forward-looking
information as they involve the implied assessment, based on certain estimates
and assumptions that, among others, the reserves and resources described exist
in the quantities predicted or estimated.
    The estimates of reserves and future net revenue for individual
properties may not reflect the same confidence level as estimates of reserves
and future net revenue for all properties, due to the effects of aggregation.
The reserves of the Company, effective as of December 31, 2008 were estimated
by GLJ to be: Proved Developed Producing - 5,387

    mboe, Total Proved Reserves - 7,139 mboe, Proved plus Probable Producing
- 6,947 mboe and Total Proved plus Probable Reserves - 10,043 boe.
    Forward-looking information and statements are often, but not always,
identified by the use of words such as "anticipate", "seek", "believe",
"expect", "hope", "plan", "intend", "forecast", "target", "project",
"guidance", "may", "might", "will", "should", "could", "estimate", "predict"
or similar words or expressions suggesting future outcomes or language
suggesting an outlook. By their very nature, forward-looking information and
statements involve inherent risks and uncertainties, both general and
specific, and risks that predictions, forecasts, projections and other
forward-looking information and statements will not be achieved. We caution
readers not to place undue reliance on these statements as a number of
important factors could cause the actual results to vary materially from the
forward-looking information or statements. These factors include, but are not
limited to: the volatility of oil and gas prices; production and development
costs and capital expenditures; the imprecision of reserve and resource
estimates and estimates of recoverable quantities of oil, natural gas and
liquids; the Company's ability to replace and expand oil and gas reserves;
environmental claims and liabilities; incorrect assessments of value when
making acquisitions or dispositions; increases in debt service charges; the
loss of key personnel; the marketability of production; defaults by third
party operators; unforeseen title defects; fluctuations in foreign currency
and exchange rates; inadequate insurance coverage; compliance with
environmental laws and regulations; changes in tax and royalty laws; the
Company's ability to access external sources of debt and equity capital; and
the Company's ability to obtain equipment in a timely manner to carry out
development activities. Further information regarding these factors may be
found under the headings "Risk Factors" and "Industry Conditions" in the
Company's most recent Annual Information Form, under the heading "Business
Risks" in the Company's Management's Discussion and Analysis for the year
ended December 31, 2008, and in the Company's most recent consolidated
financial statements, management information circular, quarterly reports,
material change reports and news releases available under the Company's
profile on SEDAR (www.sedar.com). Readers are cautioned that the foregoing
list of factors that may affect future results is not exhaustive. When relying
on our forward-looking statements to make decisions with respect to the
Company, investors and others should also careful y consider information set
forth in the section "Forward-Looking Information" of the Company's most
recent Annual Information Form respecting the assumptions upon which the
Company bases certain forward-looking information and the uncertainties
inherent in such assumptions.
    The Company does not assume responsibility for the accuracy and
completeness of the forward-looking information or statements and such
information and statements should not be taken as guarantees of future
outcomes. Subject to applicable securities laws, the Company does not
undertake any obligation to revise these forward-looking information or
statements to reflect subsequent events or circumstances. Furthermore, the
forward-looking information contained in this press release are made as of the
date of this document and the Company does not undertake any obligation to
update publicly or to revise any of the included forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by applicable law. The forward-looking information and statements
contained in this press release are expressly qualified by this cautionary
statement.
    For the purposes of this press release, boes have been calculated on the
basis of six thousand cubic feet of gas to one barrel of oil. The term boe may
be misleading, particularly if used in isolation. A boe conversion ratio of
six thousand cubic feet to one barrel 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: John Rossall, President & CEO, jrossall@psx.ca;
or George Yee, Vice President Finance & Chief Financial Officer, gyee@psx.ca,
(403) 268-3940

Organization Profile

PROSPEX RESOURCES 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