Watch Resources Ltd. Announces Results of 2006 Year end Reserves Report


    CALGARY, April 23 /CNW/ - Watch Resources Ltd. ("Watch" or the
"Corporation") (TSXV - WRL) announces that McDaniel & Associates Consultants
Ltd. ("McDaniel") has completed its evaluation of the Corporation's oil and
natural gas reserves and has prepared their reserve report to the Corporation
in respect thereof with an effective date of December 31, 2006 (the "2006
Reserve Report"). Watch expects to file its Statement of Reserves Data and
Other Oil and Gas Information as required by National Instrument 51-101 of the
Canadian Securities Administrators and associated engineers and management and
board reports concurrently with the filing of its annual financial statements
and accompanying management's discussion and analysis later this month. These
filings will be available for review once filed by accessing the Corporation's
profile at
    As at December 31, 2006, based on the 2006 Reserve Report and certain
assumptions specified herein, the Corporation's net proved plus probable
reserves were 318.7 mboe, an increase of approximately 18% from 270.7 mboe
during the comparable period in 2005. These current reserve estimates are
weighted 80% to heavy oil reserves. Proven reserves increased to 141.9 mboe, a
9.4% increase from 129.7 mboe in 2005. Probable reserves increased to
176.6 mboe, a 25.0% increase from 141.3 mboe in 2005. The 2006 reserves are
net of production, revisions and royalties.
    The 2006 Reserve Report assesses a net present value, as at December 31,
2006, of Watch's reserves (forecast prices and costs), based on a 10% discount
rate, of $3,591,600. This value represents a 29% decrease, as at such date,
from the estimated value of $5,034,000 in the comparable period in 2005. This
decrease in value is primarily attributable to a revision in natural gas
reserves given lower than expected production rates and associated water
inflow and an increase in the cost of operating Watch's cold heavy oil
production during its start up phase of operation. The Corporation is
optimistic that these operating costs for cold heavy oil production can be
reduced, on a per well basis, in the future as additional wells are brought on
stream and more consistent daily production levels are achieved after the
initial "clean up" period.
    During the first quarter of 2007, the Corporation completed the first
phase of its 2007 drilling program. As previously disclosed, Watch drilled the
first 11 wells of its 21 well drilling program for the year. Of these wells,
10 were cased as multi-zoned potential heavy oil wells and one was cased as a
potential Grand Rapids gas well. None of the results of this drilling program
are included in the December 31, 2006 reserves evaluation. It is the
Corporation's intention to complete a 2007 drilling program which will see an
additional 8 to 10 wells drilled and all 160 acre production spacing units
evaluated on Watch's main seven and one half section heavy oil play.
    While it is too early to comment on the ultimate production of these
wells, management of Watch is encouraged by results to date which presently
indicate as many as seven separate heavy oil zones on its acreage. Completion
activities have commenced on six of the cased oil wells and these wells are
now in their preliminary production phase. Currently, the Corporation is shut
down in the field due to spring break up, however, field operations are due to
commence once dry access can be obtained.
    For the comparative purposes specified above, as between December 31,
2005 and December 31, 2006, the Corporation made certain estimates of proven
plus probable reserves as at December 31, 2005 to estimate reserve results to
Watch on a pro-forma basis as if Watch had been combined or amalgamated with
Energy 51 Inc. ("Energy 51") as at December 31, 2005. Watch and Energy 51
amalgamated effective January 1, 2007 (the "Amalgamation").
    Prior to the Amalgamation, Watch and Energy 51 shared a common joint
working interest in most evaluated properties and in part on the Energy 51
reserve report as at March 31, 2006 and the reserve report of Watch
(pre-Amalgamation) as at December 31, 2005 (the "2005 Reserve Report"),
management of Watch (in conjunction with McDaniel evaluators) have assumed
that the values attributed to the reserves of Watch in the 2005 Reserve
Report, can appropriately be doubled to arrive at an approximate estimated
reserve amount and value as at December 31, 2005 for the combined Watch-Energy
51 entity for the comparative purposes used herein. The 2006 Reserve Report
contains an evaluation of the Corporation and Energy 51 on a combined basis.
    Randy Buchanan, President and CEO of Watch is quoted as saying "Despite
lower than expected initial production rates, management is encouraged by the
successful geologic results of the first phase of our heavy oil drilling
program. Our field activities have run smoothly. The Corporation is well
positioned financially with a strong cash position and no debt to conclude our
initial exploration of this potentially significant oil resource".

    Cautionary Statements

    The term barrel of oil equivalent ("boe") may be misleading, particularly
if used in isolation. A boe conversion ratio of one boe for six thousand cubic
feet of natural gas is based on an energy-equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. All boe conversions in this news release are
derived by converting gas to oil in the ratio of six thousand cubic feet of
gas to one barrel of oil.

    The information in this news release includes certain information and
statements about management's view of future events, expectations, plans and
prospects that constitute forward looking statements. These statements are
based upon assumptions that are subject to significant risks and
uncertainties. Because of these risks and uncertainties and as a result of a
variety of factors, the actual results, expectations, achievements or
performance may differ materially from those anticipated and indicated by
these forward looking statements. Although the Corporation believes that the
expectations reflected in forward looking statements are reasonable, it can
give no assurances that the expectations of any forward looking statements
will prove to be correct. The Corporation disclaims any intention and assumes
no obligation to update or revise any forward looking statements to reflect
actual results, whether as a result of new information, future events, changes
in assumptions, changes in factors affecting such forward looking statements
or otherwise.

    The TSXV has neither approved nor disapproved the contents of this press

For further information:

For further information: Watch Resources Ltd., 305, 707-10th Avenue
S.W., Calgary, Alberta, T2R 0B3, Randy Buchanan, President and Chief Executive
Officer, Telephone: (403) 265-1951 ext. 223

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