Cloudbreak Announces 4 MMB of Unrisked NI 51-101 Prospective Crude Oil Resources
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 07/15/10 -- Cloudbreak Resources Ltd. ('Cloudbreak') (TSX VENTURE: CDB)(PINK SHEETS: CUDBF)(FRANKFURT: C6K) has received NI 51-101 compliant prospective resource estimates on all ten of the oil leases to be acquired pursuant to the purchase agreement announced by it on May 6, 2010. The ten leases cover a total of 3,659 acres (5.6 sections) in Saskatchewan and Manitoba. The independent NI-51-101 report both supports and recommends the development of all ten properties, targeting crude oil.
Chapman Petroleum Engineering Ltd. of Calgary, Alberta has prepared a prospective resource evaluation report (the 'Report'), effective June 1, 2010, in accordance with section 5.9 of National Instrument 51-101 ('NI 51-101') - 'Standards of Disclosure for Oil and Gas Activities'. Over all, Chapman has reported an unrisked average prospective resource of 4 million barrels of oil with an undiscounted value of $232 million, and a risked average prospective resource of 1 million barrels of oil with an undiscounted value of $47 million. Chapman Petroleum Engineering Ltd. is a Canadian consulting firm founded in 1985 that provides a comprehensive range of services to the domestic and international oil and gas industry, and the key professionals are Qualified Reserve Evaluators and Auditors under NI 51-101.
The properties covered by the leases are located in Manitoba and Saskatchewan. Manitoba is currently ranked by the Fraser Institute as the most attractive Canadian province or territory for oil and gas investment, and Saskatchewan is in second place. Both provinces are globally competitive, with Manitoba ranked 8th and Saskatchewan 17th out of 133 jurisdictions worldwide. All targets are in close proximity to existing oil production and infrastructure. All of the prospects consist of five year leases that are in good standing until at least August 8, 2014.
'Chapman's independent resource evaluation confirms that we have a solid base for the development of light oil assets,' said Cloudbreak President Richard Macey. 'The calculated average probability of success of 25.4% for all ten leases, shallow average reservoir depth of only 1324 m, and close proximity to infrastructure provide these projects with robust risked economics and support our belief that there is significant conventional oil remaining to be exploited in southeast Saskatchewan and southwest Manitoba. We now have an excellent base for building shareholder value.'
Cloudbreak has agreed to acquire a 100% interest in the leases, subject to certain royalties, as described in its May 6, 2010 news release. On May 27, 2010 Cloudbreak announced that its filing in respect of that agreement had been conditionally accepted by the TSX Venture Exchange. The acquisition remains subject to final acceptance by the TSX Venture Exchange.
The full Report, 'Evaluation of Prospective Resources - Ten properties Saskatchewan and Manitoba owned by Cloudbreak Resources Ltd.' is based on the authors' review of technical data including geology, petrophysical logs and reservoir parameters. The resources described in the Report and in this release are 'undiscovered resources' as defined in the Canadian Oil and Gas Evaluation Handbook. Undiscovered resources are defined as those quantities of oil and gas estimates on a given date to be contained in accumulations yet to be discovered. The estimates of the potentially recoverable portions of undiscovered resources are classified as prospective resources. Prospective resources are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations technically viable and economic to recover. In accordance with NI 51-101, Cloudbreak declares that there is no certainty that any portion of the resources will be discovered and that the estimated values do not represent fair market value. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
In accordance with Staff Notice 51-327 - 'Oil and Gas Disclosure: Resources other than Reserves Data' of the Canadian Securities Administrators, Cloudbreak provides the following estimates from the Report:
GROSS RISKED AND UNRISKED RECOVERABLE RESOURCE ESTIMATES
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Unrisked Unrisked Unrisked Unrisked Risked
best high low average average Oil
estimate estimate estimate estimate estimate gravity
PROSPECT (MSTB) (MSTB) (MSTB) (MSTB) (MSTB) API
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J1 500 625 250 458 105 37
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J2 214 378 152 248 84 31
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J3 174 428 92 231 53 27
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J4 228 304 168 233 54 37
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J5A 94 106 52 84 33 32
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J5B 246 308 123 226 56 14
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J6A 448 532 276 419 151 33
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J6B 956 1160 132 849 170 32
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J7 552 690 276 506 116 35
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J8 98 116 89 101 37 35
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J9 212 616 160 329 82 23
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J10 340 440 200 327 75 37
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TOTAL 4,062 5,703 1,970 4,011 1,016
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In establishing the probability of success to generate the risked average estimates, Chapman considered both geological and commerciality factors. The Report recommends the development of all prospects.
ON BEHALF OF THE BOARD
Richard Macey, President & Director
Neither 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.
Contacts:
Cloudbreak Resources Ltd.
Rich Macey
(604) 669-0401 or Toll free: (877) 669-0401
Cloudbreak Resources Ltd.
Craig Naughty
(604) 669-0401 or Toll free: (877) 669-0401
(604) 669-0414 (FAX)
www.cloudbreakresources.com