Saxon Takes Working Interest In New Projects



    DALLAS, January 31 /CNW/ - Saxon Oil Company Ltd. (TSX VENTURE:SXN) is
committed to effective exploration and development of oil and gas reserves to
deliver strong shareholder returns. Saxon has enhanced and expanded the
management team to accelerate our ability to find quality investment projects.

    Saxon executed an agreement with KEPCO Operating for a non-operated ten
percent (10%) working interest in the Hailey No. 1 in the Nebo-Hemphill Field,
LaSalle Parish, Louisiana. The well was drilled in the 4th quarter 2006 and
pipe was set. The well targeted the Wilcox A-4 sand and logged 13 net feet of
oil to a shale break in a 20 foot gross sand interval. Excellent permeability
and porosity of 26 percent were confirmed by sidewall cores. The Operator has
advised Saxon that it plans to complete the well in February and is awaiting
arrival of the completion rig at this time.

    Saxon also committed to a ten percent (10%) working interest in the East
Sherman Prospect, a re-entry and deepening to the Ordovician-age Oil Creek
Sandstone in Grayson County, Texas with KEPCO. The Douthat #1 has been
successfully cleaned out to the old well total depth utilizing a workover rig
and the Operator is waiting on a drilling rig to deepen the well to the
objective reservoir. Work on this well is expected to be complete by March of
2007.

    Saxon remains committed to two West Texas wildcat wells testing the
Pennsylvanian age Wolfcamp and the Ordovician age Ellenberger. These
opportunities have been reviewed by new management and appear to be viable
exploration opportunities. Originally scheduled for the fourth quarter of 2006
these have now been delayed to at least the second quarter of 2007 largely due
to rig availability issues.

    Hudson Hills oil and gas production from the Cretaceous age Navarro
sandstone in Central Texas has been established. This lease acreage of shallow
oil production was historically stimulated using either hydrochloric acid or
limited sand fracture stimulation. Saxon introduced a new stimulation
technique that utilizes coiled tubing to create one inch diameter 300 foot
long horizontal laterals that are then fracture stimulated and packed. We are
encouraged with the initial production rates from the wells treated with
radial jet lateral enhancement technology. Subsequent to completion we
experienced minor mechanical problems due to sand influx and scale
precipitation impeding the pumps. After determination of reservoir pressures
and waiting on suitable workover rig to pull tubing and change out the pumps,
production has been re-established. We have substantial lease positions at
Hudson Hills and in the nearby Heatherwood area. Saxon plans further
exploration activity during the second quarter in both Hudson Hills and
Heatherwood.

    We have reviewed numerous Barnett Shale ventures in the past three months
that we have not participated in. The cost of drilling and completing
horizontal Barnett wells increased by over 30 percent in 2006 and coupled with
lower gas prices have materially and adversely affected the economics of many
areas of this large producing region. We believe some areas of the very large
North Texas trend remain attractive but until drilling costs moderate or
product prices improve we will remain conservative in our approach to this
play.

    Our new management team at Saxon is committed to partnering with private
international companies that employ state of the industry techniques in
seismic and completion to increase success ratios and profitability. We are
reviewing very high impact projects in widely varying geographic regions (as
opposed to prospects in limited areas) for participation by the firm. We feel
strongly that by exposure to these ventures we can substantially increase our
reserve and cash flow base and improve investor returns. As we commit to these
opportunities, we will attempt to keep our stockholders informed and current
on all our activities. We remain committed to growth through drilling and
acquisition of production that contains substantial growth potential to our
company and investors.

    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.

    To find out more about Saxon Oil Company Ltd. visit our website at
www.saxonoilcompany.com.

    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 does not accept responsibility for the adequacy
and accuracy of this release.




For further information:

For further information: For Saxon Oil Company Ltd.: Quayside
Communications Patrice Nazareno, 604-515-7708 Toll Free: 866-515-7708
quaycomm@shaw.ca

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Saxon Oil Company Ltd.

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