/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES/
TSX V Trading Symbol: SWE
CALGARY, Feb. 25, 2013 /CNW/ - SilverWillow Energy Corporation ("SilverWillow" or the "Corporation") is pleased to announce an increase to its estimate of Discovered Petroleum Initially-In-Place and the assignment of Contingent Resources following an independent evaluation of the bitumen resources attributable to its oil sands property, the Audet Lands, located approximately 110 km northeast of Fort McMurray, Alberta.
"We are pleased to advise that the estimate of Discovered Petroleum Initially-In-Place has increased from 1,689.6 million barrels to 1,845.9 million barrels following Sproule's review of the results from the 2012 drilling program", announced Howard Lutley, President and Chief Executive Officer of SilverWillow. "Furthermore, of the above Discovered Resources, Sproule has assigned a best estimate of Contingent Resources to the Audet Lands of 68.4 million barrels of recoverable bitumen in place. This independent confirmation of the potential within the Audet Lands gives us added confidence as we advance the project."
Sproule Unconventional Limited ("Sproule") prepared the independent evaluation of the bitumen resources of the Audet Lands in the Athabasca Oil Sands region of Alberta for SilverWillow effective December 31, 2012. Sproule's work on the Audet Lands included a geological evaluation and an engineering review of the work conducted by SilverWillow's independent consultants with respect to caprock integrity tests and reservoir simulation studies to determine the potential for production of bitumen using Steam Assisted Gravity Drainage ("SAGD") methods.
SilverWillow is currently engaged in the engineering design of a pilot and a commercial project. It is, therefore, premature to evaluate the economic viability of the project at this time, and the economic status of the contingent resources assigned to SilverWillow's Audet Lands is undetermined.
In early 2012 SilverBirch Energy Corporation ("SilverBirch"), the prior holder of the Audet Lands, completed an exploration drilling program consisting of 38 core holes, 2D seismic, mini-frac tests and geo-mechanical testing. The 2012 program was a follow-up to the 34 core holes drilled on the Audet Lands in 2011 by SilverBirch. These leases, which are now owned 100% by SilverWillow, are located 110 km northeast of Fort McMurray, and approximately 40 km north of Cenovus Energy Inc.'s proposed Telephone Lake project.
During 2012, SilverWillow engaged geo-mechanical engineering and reservoir engineering consultants to assist the Corporation in the assessment of the Audet Lands for the production of bitumen by SAGD methods. The results of the technical work by the consultants indicate that the reservoir and caprock properties will allow production by SAGD methods at appropriate pressures without compromising the integrity of the caprock. Additional studies will be undertaken to properly assess the areal extent of the caprock properties and the requirement for a small-scale pilot to demonstrate the integrity of the caprock under operating conditions. SilverWillow will acquire additional caprock data in its 2013 exploration program and is in the process of determining the cost of a small caprock pilot test for the Audet Lands. This will provide important field data regarding performance of the caprock, and will assist in the design of SilverWillow's proposed 12,000 barrel per day SAGD development project.
SilverWillow Energy Corporation
Contingent Bitumen Resources1
as of December 31, 2012
1The term "contingent resources" is taken from the Canadian Oil and Gas Evaluation Handbook ("COGEH") as published by the Society of Petroleum Evaluation Engineers (Calgary Chapter). The volumes listed in the chart above entitled, "Contingent Bitumen Resources" refer to potentially recoverable volumes of bitumen resources. The volumes of contingent bitumen resources in the above chart are presented in millions of barrels at stock tank conditions. There is no certainty that it will be commercially viable to produce any portion of the contingent bitumen resources.
SilverWillow has updated its investor presentation to reflect this announcement. The presentation is posted on SilverWillow's website at www.swenergy.ca.
The preparation and disclosure of the reported resource estimates are the responsibility of SilverWillow's management and require approval by the Corporation's Reserves and HSE Committee and Board of Directors. Sproule's responsibility is to express an opinion on the contingent bitumen resources based on the data provided by management. Sproule carried out the evaluation and review in accordance with standards established by National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. These standards require that the contingent resources estimates be prepared in accordance with COGEH.
Discovered Petroleum Initially-In-Place (equivalent to Discovered Resources) is defined in COGEH as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of discovered petroleum initially-in-place includes production, reserves, and contingent resources; the remainder is unrecoverable.
Contingent Resources are defined in COGEH 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.
With respect to the Contingent Resources associated with SilverWillow's Audet Lands, the contingencies which prevent the classification of these resources as reserves are as follows: the need for a pilot to verify the effectiveness of the McMurray Formation shales as caprock for steam containment during the SAGD operation; the absence of regulatory approvals for future commercial development; the absence of a firm commercial development plan; and the uncertainty of funding approval for commercial developments.
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.
For further information including risk factors, please see SilverWillow's Management Discussion and Analysis for the period ended September 30, 2012 which was filed on SEDAR at www.sedar.com and the Corporation's website at www.swenergy.ca.
About SilverWillow Energy
SilverWillow Energy Corporation is a Calgary, Alberta based pre-production oil sands company with a portfolio of exploration leases in Canada's Athabasca oil sands. To learn more, please visit www.swenergy.ca.
FORWARD-LOOKING INFORMATION: This news release contains "forward-looking information" within the meaning of applicable securities laws. 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. The forward-looking information in this news release relates, but is not limited to, statements with respect to the Corporation's plans to conduct additional studies and exploration on the Audet Lands, the development of a proposed 12,000 barrel per day SAGD project. In addition information relating to "resources" is forward-looking information, as it involves the implied assessment, based on estimates and assumptions, that the resources described exist in the quantities predicted or estimated, and can be profitably produced in the future.
The forward-looking information set out in this news release, is based on certain expectations and assumptions regarding, among other things, the exploration and development of the Audet Lands; the ability of the Corporation to obtain required regulatory approval for the development of the Audet Lands; the geography of the areas in which SilverWillow will be exploring; and the sufficiency of budgeted capital expenditures in carrying out planned activities. These expectations and assumptions are based on certain factors and events that are not within the control of SilverWillow and there is no assurance they will prove to be correct.
Forward-looking information is subject to known and unknown risks and uncertainties and other factors which may cause actual results, levels of activity and achievements to differ materially from those expressed or implied in such forward-looking information. Such risks, uncertainties and factors include, among others, the risk that the regulatory approvals in respect of the Audet Project will not be submitted in the timeframe or on the terms expected or at all; risks relating to the early stage of development of SilverWillow and the Audet Lands; and the general risks associated with exploring for, developing and producing bitumen. In addition, there are numerous uncertainties inherent in estimating bitumen, including many factors beyond the Corporation'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, which have inherent uncertainties. Additional risks relating to the business and operations of SilverWillow are set forth in the Corporation's TSX Venture Exchange Listing Application and in its most recent Management's Discussion and Analysis, which are filed under the Corporation's profile on SEDAR at www.sedar.com.
SilverWillow 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.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE
SOURCE: SilverWillow Energy Corporation
For further information:
please contact Howard J. Lutley, President and Chief Executive Officer, at (403) 538-7030