Saxon Oil Announces Increase of US Oil and Gas Reserves



    DALLAS, Feb. 17 /CNW/ - Saxon Oil Company Ltd. ("Saxon") (TSX.V:SXN)
(FRANKFURT: OVG) (BERLIN: OVG) announced today that the company's independent
reserve auditors, LaRoche Petroleum Consultants, Ltd. (LaRoche) of Dallas
Texas, have completed the evaluation of the company's reserves in the United
States as of December 31, 2008. This report does not include any value for the
Kansas Gas Gathering sytems or international reserves for Saxon's interests in
Italy (20% membership interest in AleAnna Resources LLC) and Spain (wholly
owned subsidiary HDC).
    LaRoche estimated the total net proved reserves of the company at
forecast prices and costs to be 482,943 barrels of oil and 3,023,293 thousand
cubic feet (Mcf) of gas plus associated plant products. This represents a
12.5% increase in oil reserves and a 36.7% increase in gas reserves year over
year for the company. The future cash flow before income taxes increased by
7.5% to $30,700,353, with future cumulative cash flow discounted at 10% per
year estimated to be $18,746,040, a 9% increase year over year.
    These increases in reserves are especially noteworthy because
year-over-year estimated crude price decreased from $80.99/barrel in 2007 to
$62.73/barrel in this report (22.5% decrease), while estimated gas prices
decreased from $7.13/Mcf to $6.90/Mcf (3.3% decrease). Estimated probable
reserves (unrisked) also increased from 43,247 barrels to 69,702 barrels (38%
increase year over year) while probable gas reserves increased from 274,117
Mcf to 459,411 Mcf (40%). Total proved plus probable future net cash flow was
estimated to be $34,226,702 which discounted at 10% was estimated to be
$20,074,376. All values were expressed in United States dollars.
    The evaluation prepared by LaRoche was carried out in accordance with
standards set out in the Canadian Oil and Gas Evaluation Handbook. Estimates
of reserves were prepared using standard geological and engineering methods
generally accepted by the petroleum industry. Because the reserves data are
based on judgments regarding future events, actual results will vary and the
variations may be material. Reserves data are the responsibility of the
company's management. The responsibility of LaRoche was to express an opinion
on the reserves data based on their estimates. Saxon will release detailed
reserves data along with year-end financial data on SEDAR later this year.
    Richard G. Green, president and CEO of Saxon, stated, "We are pleased
that for the third consecutive year Saxon has substantially increased the oil
and gas reserves of the company, which reflect the success of our business
plan. As our gas gathering systems and associated resource play in Kansas
mature and as we further develop our domestic properties, as well as our high
impact Italian gas concessions and Spanish coal mines, we anticipate continued
strong growth in net production, reserves, and cash flow, which, in turn,
should increase shareholder value."
    Highlighted reserve statistics from the last three years LPC reports (all
prepared in compliance with Canadian Form 51-101 F2 format) are shown below:

    
    Saxon Oil Net Proved Reserve Estimated @ Forecast Prices and Costs

                                                     Future Net   Discounted
                                              Gas,    Cash, US$     @ 10%
    Date                     Oil, MBO         MMcf        (000)    US$ (000)
    -------------------------------------------------------------------------
    31-Dec-2006                    57        1,936     $  8,573     $  5,710
    31-Dec-2007                   427        1,915     $ 28,385     $ 17,024
    31-Dec-2008                   483        3,023     $ 30,700     $ 18,746


    Saxon Oil Net Probable Reserve Estimated @ Forecast Prices and Costs

                                                     Future Net   Discounted
                                              Gas,    Cash, US$     @ 10%
    Date                     Oil, MBO         MMcf        (000)    US$ (000)
    -------------------------------------------------------------------------
    31-Dec-2006                     0          137     $    135     $     67
    31-Dec-2007                    43          272     $  2,914     $  1,148
    31-Dec-2008                    70          459     $  3,526     $  1,328


    Pricing Assumptions

                                  Oil,         Gas,
    Date                      US$/bbl      US$/Mcf
    -----------------------------------------------
    31-Dec-2006               $ 56.16       $ 5.39
    31-Dec-2007               $ 80.99       $ 7.13
    31-Dec-2008               $ 62.73       $ 6.90
    

    About Saxon Oil Company Ltd:

    Saxon Oil Company is a Tier One Texas-based Canadian company, trading on
the TSX Venture Exchange under the symbol SXN. The Company is an independent
oil and gas company engaged in the acquisition, development and production of
oil and natural gas reserves. The Company seeks to deliver strong shareholder
returns through an effective exploration and development program that
incorporates sound business practices with the latest oil field technologies.
The goal is to steadily increase proven reserves of oil and natural gas -
which, in turn, will lead to enhanced cash flows and earnings per share.

    This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding plans for
completion, production potential, other targeted areas and expansion and
development plans and objectives of Saxon Oil Company Ltd. are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such
statements.

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

    %SEDAR: 00005554E




For further information:

For further information: Saxon Oil Company, Patrice Nazareno, Toll Free:
1-866-515-7708, Email: quaycomm@shaw.ca

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Saxon Oil Company Ltd.

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