UTS reports contingent bitumen resources



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

    TSX Trading Symbol: UTS

    CALGARY, Feb. 14 /CNW/ - UTS Energy Corporation ("UTS") today announces
the results of the independent review of bitumen resources for the Fort Hills
Project and Lease 14.

    Fort Hills Project

    In order to comply with National Instrument 51-101, the Fort Hills Energy
Limited Partnership, made up of Petro-Canada, UTS and Teck Cominco Limited
("Teck Cominco"), retained independent resource auditors Sproule Associates
Limited ("Sproule") to prepare an audit of the Fort Hills Partners' contingent
bitumen resources and methodology used in the mine plan. In addition to the
report that was prepared for the Fort Hills Partnership, a separate report was
prepared for UTS in order for UTS to meet its annual securities reporting
requirements. The report is effective December 31, 2007.
    The range of contingent bitumen resources for the entire Fort Hills
Project and UTS' associated working interest in the proposed Fort Hills
Project over the past three years is summarized below.

    
    -------------------------------------------------------------------------
                   Fort Hills Contingent Bitumen Resources
    -------------------------------------------------------------------------
              December   December  December             UTS' 2007  UTS' 2007
              31, 2005   31, 2006  31, 2007  UTS' 2006  30% Share  20% Share
                Note 1     Note 2    Note 3  30% share     Note 4     Note 5
    -------------------------------------------------------------------------
               billion    billion   billion    billion    billion    billion
               barrels    barrels   barrels    barrels    barrels    barrels
    -------------------------------------------------------------------------
    Low
     Estimate      2.4        3.1       3.4        0.9        1.0        0.7
    -------------------------------------------------------------------------
    Best
     Estimate      3.5        4.7       4.0        1.4        1.2        0.8
    -------------------------------------------------------------------------
    High
     Estimate      4.6        5.5       4.4        1.7        1.3        0.9
    -------------------------------------------------------------------------

    (1) The December 2005 figures are from a report prepared by GLJ Petroleum
        Consultants Ltd.
    (2) The December 2006 figures are from an audit prepared by Sproule and
        were estimated using naphthenic froth treatment.
    (3) The December 2007 figures are from an audit prepared by Sproule and
        were estimated using paraffinic froth treatment.
    (4) This shows the impact of the change in type of froth treatment and
        change in pit boundaries.
    (5) This shows the combined impact of the changes within the Fort Hills
        Project referenced in Note 4 and the change in UTS' working interest
        from 30% to 20%.
    

    The contingent bitumen resource estimates in the above table represent
partially de-asphalted bitumen. The "Best Estimate" is the current basis of
the audited mine plan. The contingencies that prevent these bitumen resources
from being classified as reserves include, but are not limited to, revised
regulatory approval, completed feasibility study and company commitment.

    
    There are two major contributions to the reduction in the estimate:
    1.  the change in the pit boundaries which resulted from changes to the
        Out of Pit Tailings Area (OPTA) design and plant layout optimization;
        and
    2.  the move from naphthenic to paraffinic froth treatment to produce a
        higher quality product. This change in froth treatment technology
        affects the overall resource as paraffinic froth treatment rejects a
        portion of the asphaltenes from the bitumen, but is partially offset
        by higher yield at the upgrader.
    

    "Moving to de-asphalted bitumen product from the mine is, in our view, a
very positive change. This is a fungible bitumen product we believe will add a
great deal of flexibility and value in the production phase and provides
flexibility in marketing barrels and earlier cash flow before the upgrader
comes on stream. It also allows for a staggered start up to the mine and
upgrader," said Dr. William Roach, President and Chief Executive Officer. "The
reduction in volumes, while significant, is partially offset by the higher
bitumen product quality and higher yield of synthetic crude oil production.
Even at these reduced volumes, the fully built out Fort Hills Project, which
could produce up to 320,000 barrels per day of bitumen, has a field life of
around 40 years."
    Contingent Bitumen Resources are those quantities of bitumen 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.
    The Fort Hills Project, located 90 kilometres north of Fort McMurray, is
held by UTS with a 20% working interest, Teck Cominco with a 20% working
interest and Petro-Canada with a 60% working interest and operatorship. The
Fort Hills Project remains subject to regulatory approvals and project
sanction by the Partners, expected in late 2008.

    Lease 14

    UTS owns 50% of Lease 14 with Teck Cominco owning the other 50%.
Teck Cominco acquired their 50% interest for $200,000,000 on the basis that
Lease 14 contained 400 million barrels of whole bitumen. Lease 14 is located
adjacent to the Fort Hills Project on the west side of the Athabasca River.
    In a report dated February 14, 2008, GLJ Petroleum Consultants Ltd.
("GLJ") presented independent estimates of the contingent resources associated
with Lease 14. The report has an effective date of December 31, 2007. GLJ's
gross lease estimates are presented in the table below both before and after
shrinkage due to paraffinic froth treatment. Lease 14 is still in the early
stages and further evaluation is required to confirm the planning basis before
reserves can be assigned. Contingent resources are defined above.

    
    -------------------------------------------------------------------------
                    Lease 14 Contingent Bitumen Resources
    -------------------------------------------------------------------------
    MMbbls                    Low Estimate    Best Estimate    High Estimate
    -------------------------------------------------------------------------
    Whole Bitumen                      297              380              430
    -------------------------------------------------------------------------
    Partially De-Asphalted
     (post froth treatment)            270              350              400
    -------------------------------------------------------------------------
    

    "The latest independent evaluations of our most mature assets, namely the
Fort Hills Project and Lease 14, in conjunction with the preliminary drilling
results on our other acreage, in particular Lease 311 and surrounding area,
give rise to our strong belief that UTS has built a solid platform for growth
which, when taken together, will yield incremental value for our
shareholders." stated Dr. Roach. "We are extensively drilling Lease 311 and
area this season and intend to have sufficient density for a contingent
resource estimate by year end."
    The Lease 311 and surrounding area is owned 50% by UTS and 50% by Teck
Cominco.
    There are a number of potential development options for the production of
bitumen from each of the areas mentioned above. At present, no decisions have
been made regarding quality specifications, marketing and transportation
arrangements, or joint development with other area operators. There is no
certainty that it will be commercially viable to produce any portion of the
resources on any of the above mentioned properties.

    FORWARD-LOOKING INFORMATION: Except for statements of historical fact
relating to the Company, this news release contains "forward-looking
information" within the meaning of applicable securities law. 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 such as the references to the Company's
anticipated mine plan, drilling results, capital expenditures, drilling plans,
estimated resources 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. The Company 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; or Wayne I. Bobye, Vice President and Chief Financial
Officer, Tel: (403) 538-7030

Organization Profile

UTS ENERGY CORPORATION

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