UTS announces significant increase in contingent bitumen resources



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

    TSX Trading Symbol: UTS
    

    CALGARY, Feb. 5 /CNW/ - UTS Energy Corporation ("UTS" or the "Company")
today announced the addition of its Frontier Project to its contingent bitumen
resource status following the results of an independent review of bitumen
resources for its three major oil sands projects.
    "These results demonstrate the ability of UTS and, specifically, its
Exploration and Development Team to create long-term value," said William
Roach, President and Chief Executive Officer. "Working alongside our partners,
we have managed to create value from our initial assessment of the lands in
2005, to posting and purchasing the associated oil sands rights in 2006 and
2007, and then pursuing the exploration and delineation, to the point where we
are currently planning oil sands mining projects based on significant
contingent resources."
    The three year exploration program has resulted in identifying two
additional oil sands mining projects: the Equinox oil sands project ("Equinox
Project") and Frontier oil sands project ("Frontier Project"), in both of
which UTS holds a 50 per cent working interest and Teck holds the other 50 per
cent.
    UTS engaged Sproule Unconventional Limited ("Sproule") to prepare an
independent opinion of the contingent bitumen resources of UTS effective as of
December 31, 2008 (the "Sproule Report"). This included a geological
evaluation of the Fort Hills Project and the Frontier Project, and an audit of
the Equinox Project. Sproule also reviewed the methodology used to estimate
these volumes from the current mine planning or preliminary pit design basis.

    
                 UTS Energy Contingent Bitumen Resources(1)
                           as of December 31, 2008
    -------------------------------------------------------------------------
    Project                         Project                 Net to UTS
                              Millions of Barrels      Millions of Barrels
    -------------------------------------------------------------------------
                           Low      Best     High     Low      Best     High
    -------------------------------------------------------------------------
    Fort Hills            2,100  3,880(2)   4,350      421      776      870
    -------------------------------------------------------------------------
    Frontier                980    1,550    2,550      490      774    1,275
    -------------------------------------------------------------------------
    Equinox                 230      330      380      114      166      189
    -------------------------------------------------------------------------
    Total(3)              3,310    5,760    7,280    1,025    1,717    2,334
    -------------------------------------------------------------------------
    (1) The term "contingent resources" is taken from the Canadian Oil and
        Gas Evaluation Handbook as published by the Canadian Section of the
        Society of Petroleum Evaluation Engineers ("COGE Handbook"). The
        volumes listed in the chart above entitled, "Contingent Bitumen
        Resources" refer to potentially recoverable volumes of asphaltene
        reduced bitumen resources. The volumes of contingent bitumen
        resources in the above chart were calculated at the outlet of the
        proposed extraction plant. There is no certainty that it will be
        commercially viable to produce any portion of the contingent bitumen
        resources.
    (2) The current FEED mine plan is the basis of the Best Estimate at Fort
        Hills.
    (3) Properties in summation have differing contingencies
    

    "These are very encouraging results, particularly in light of current
commodity prices. As these prices recover, we would hope to see the improved
economics reflected in our contingent resources as we can envisage higher
recoverable volumes at each of the Frontier and Equinox Projects" said Dr.
Roach.
    Norwest Corporation, an independent geological and engineering consulting
company, provided UTS and Teck with pit shell analyses for the Frontier
Project pursuant to a report dated December 18, 2008. Utilizing standard
mining criteria, Norwest developed preliminary ""mine pits with a total volume
to bitumen-in-place ("TV:BIP") cutoff of 12:1 and 16:1. The Alberta Energy
Resources Conservation Board considers TV:BIP 12:1 to be the minimum economic
limit for surface mineable bitumen volumes. The TV:BIP ratio measures the
total volume of material (overburden and oil sands) relative to the volume of
bitumen in place; it considers how much material must be removed to access the
oil sands as well as the ore grade, or in addition to the richness of the
deposit. Given the prevailing cost/revenue environment in the oil sands
industry a TV:BIP 16:1 pit was also developed to show the incremental
potential for the area. The "Best" and "High" estimates used by Sproule and
summarized in the table above are based on the mine pits developed by Norwest
using a TV:BIP of 12:1 and 16:1 respectively.
    "The Frontier and Equinox Projects provide a combined diversified asset
base of some 940 million barrels of contingent bitumen resources net to UTS
with significant added upside potential should oil prices rise above current
levels and should our activities on our exploratory lands continue to show
promise" said Dr. Roach.
    UTS has completed a preliminary drilling program on Leases 610 and 840,
which constitute the northern extension of the Frontier Project, but
additional infill drilling is required to fully define the resource potential
in this area. On Lease 421 in the Firebag area, UTS has previously announced
that five core holes, drilled in 2008, all encountered high grade oil sands,
with thicknesses ranging from 10 to 25 metres. UTS is currently undertaking
additional drilling on Lease 421 and expects to announce those findings
shortly.
    UTS has a 20 per cent working interest in the Fort Hills Project and a 50
per cent working interest in each of the Frontier and Equinox Projects. UTS
also holds a 50 per cent interest in other prospective oil sands leases.
    The Fort Hills Project is an oil sands project to develop, mine, extract,
potentially upgrade and sell the recoverable bitumen found in the Alberta Oil
Sands Lease Nos. T05, 008 and T52, which cover a contiguous area of
approximately 18,684 hectares (approximately 46,170 acres) and are located in
northeastern Alberta approximately 90 kilometres north of Fort McMurray and
500 kilometres northeast of Edmonton.
    The Frontier Project is an oil sands mining project associated with the
development of that portion of the Athabasca Oil Sands Area identified by
Alberta Oil Sands Lease Nos. 311, 468, 470, 477, 610 and 840 and is located in
northeastern Alberta approximately 100 kilometres north of Fort McMurray and
500 kilometres northeast of Edmonton.
    The Equinox Project is an oil sands project related to the development of
Alberta Oil Sands Lease No. 14 located in northeastern Alberta. The Equinox
Project bisects the Pierre River Project, approximately 90 kilometres north of
Fort McMurray and 500 kilometres northeast of Edmonton.

    Methodology

    The preparation and disclosure of the reported resource estimates are the
responsibility of UTS' management with approval by the Company's Audit and
Reserves Committee. Sproule's responsibility is to express an opinion on the
bitumen-in-place and contingent bitumen resources data based on the evaluation
or audit. Sproule carried out the evaluation or audit in accordance with
standards established by the Canadian Securities Administrators within
National Instrument 51-101. Those standards require that the bitumen-in-place
and contingent resources data be prepared in accordance with the COGE
Handbook.
    Contingent resources are defined in the COGE Handbook as those quantities
of petroleum estimated, as of a given date, to be potentially recoverable from
known accumulations using established technology or technology under
development, but which are not currently considered to be commercially
recoverable due to one or more contingencies. Contingencies may include
factors such as economic, legal, environmental, political and regulatory
matters or a lack of markets. It is also appropriate to classify as
"contingent resources" the estimated discovered recoverable quantities
associated with a project in the early project stage.
    There is no certainty that any of the Fort Hills Project, the Equinox
Project or the Frontier Project will produce any portion of the volumes
currently classified as "contingent resources". The primary contingencies
which currently prevent the classification of the contingent resources
disclosed in the table above as reserves consist of: current uncertainties
around the specific scope and timing of the development of each of the Fort
Hills Project, the Equinox Project or the Frontier Project; lack of regulatory
approvals for certain aspects of such projects; the uncertainty regarding
marketing plans for production from the subject areas; improved estimation of
project costs; commodity price fluctuations; in the case of the Fort Hills
Project, the acceptance within the Fort Hills partnership of the updates to
the Fort Hills Project scope, timing, costs estimates and final Board of
Directors approval of each of the Fort Hills partnership general and limited
partners; and those other risks and contingencies described below and under
"Risk Factors" in UTS' annual information form available under UTS' profile at
www.sedar.com. Contingent resources do not constitute, and should not be
confused with, reserves. There is no certainty that it will be commercially
viable to produce any portion of the contingent resources on any of the above
mentioned properties.

    About UTS

    UTS is focused on the creation of shareholder value through exploration,
development and production of hydrocarbon resources, mainly mineable oil sands
deposits from the Athabasca Oil Sands Area in northeastern Alberta.
    UTS was instrumental in re-establishing the Fort Hills Oil Sands Project
and is the principal founder of the Fort Hills Energy Limited Partnership. UTS
holds a 20 per cent working interest in the Fort Hills Project, a mature
mining project, located north of Fort McMurray. Beyond the Fort Hills Project,
UTS has expanded the scope of its opportunities through a successful and
continuing lease acquisition and exploration program. These other leases are
expected to provide organic growth opportunities and future funding
flexibility for UTS.
    The Equinox Project holds 330 million barrels of contingent resource and
the Frontier Project holds approximately 1.6 billion barrels of contingent
resource. Further, UTS holds a 50 per cent working interest in an additional
97,024 hectares (242,560 acres) of prospective oil sands leases. Within these
additional leases, on Lease 421 in the Firebag area, UTS recently announced
five core holes were drilled in 2008 and all five wells encountered high grade
oil sands, with thicknesses ranging from 10 to 25 metres. Since then, UTS has
acquired additional acreage in this area and further drilling this season will
confirm the extent of this resource. Lease 421 lies directly east of Total E&P
Canada Ltd.'s Northern Lights Project.
    UTS is committed to responsible resource development by conducting its
business in a manner that reduces environmental effects, protects workers' and
communities' health and safety and recognizes stakeholder interests.
    UTS Energy Corporation is based in Calgary, Alberta. The Company's common
shares (UTS) are traded on the Toronto Stock Exchange.

    FORWARD-LOOKING INFORMATION: Except for statements of historical fact
relating to UTS, this news release contains "forwarding-looking information"
within the meaning of applicable securities law. The forward-looking
statements in this press release relate to, but are not limited to, statements
with respect to the Company's anticipated mine plan, drilling results, capital
expenditures, drilling plans, estimated resources, rate of recovery and
production estimates of bitumen resources are based on the opinions and
estimates of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those anticipated in the
forward-looking statements. There are numerous uncertainties inherent in
estimating bitumen, including many factors beyond the Company's control, and
no assurance can be given that the indicated level of bitumen or the recovery
thereof will be realized. In general, estimates of bitumen are based upon a
number of factors and assumptions made as of the date on which the resource
estimates were determined, such as geological and engineering estimates,
certain TV:BIP ratios and pit boundaries, which have inherent uncertainties.
Forward-looking information is frequently characterized by words such as
"plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and
other similar words, or statements that certain events or conditions "may" or
"will" occur. Forward-looking information is based on the opinions and
estimates of management at the date the statements are made, and are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ materially from those anticipated in the
forward-looking statements. UTS undertakes no obligation to update
forward-looking information if circumstances or management's estimates or
opinions should change except as required by law. The reader is cautioned not
to place undue reliance on forward looking information.





For further information:

For further information: Dr. William J. F. Roach, President and Chief
Executive Officer at (403) 538-7030

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UTS ENERGY CORPORATION

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