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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
|
Developable-
Original-Bitumen-
In-Place (MMbbl) |
Recoverable-
Bitumen-In-
Place (MMbbl) |
Recovery
Factor
(%) |
Low
Estimate |
58.1 |
29.0 |
49.9 |
Best
Estimate |
123.6 |
68.4 |
55.3 |
High
Estimate |
311.5 |
173.9 |
55.8 |
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.
Methodology
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