CALGARY, Alberta and DENVER, Feb. 7 /CNW/ -- Storm Cat
Energy Corporation (Amex: SCU; TSX.V: SME) today announced that it has entered
into a Purchase and Sale Agreement with a privately held company to purchase
100% right, title and interest in oil and gas leases in Van Buren, Searcy and
Pope Counties, Arkansas. The acreage is undeveloped and contains
approximately 20,000 gross and 16,000 net mineral acres. Pending the
satisfactory completion of due diligence review, the transaction is due to
occur by mid-April, 2006. The effective date of the transaction is
February 1, 2006. Transaction terms were not disclosed.
Storm Cat Energy's President, Scott Zimmerman, said: "Today's
transaction, in one of the highest profile plays in North America, complements
our business plan of acquiring leasehold in emerging unconventional gas
resource plays. The acreage is located in the regionally extensive
Fayetteville shale play in the Arkoma Basin of northwest Arkansas. The
Fayetteville shale is an unconventional shale gas reservoir ranging in depth
from 1,000 feet to 6,500 feet. Acquiring acreage in the Fayetteville Shale
play is consistent with Storm Cat's stated focus of pursuing, exploring and
developing unconventional gas reserves from fractured shales, coal beds and
tight sand formations. We have seen the repeatable success that companies
like Southwestern Energy are enjoying and are pleased to gain entry into the
play. By our initial evaluation, we anticipate estimated ultimate recoveries
of 1.0 Bcfe to 1.4 Bcfe per horizontal well with an average cost to drill and
complete of $1.6 million. These are attractive finding costs, even with
higher service costs of drilling these horizontal wells. This position
provides us with over 120 net drillable locations. By developing these
properties in a timely fashion, we anticipate adding to the cash flow provided
by our Powder River Basin properties while we continue to unlock the vast
resource potential that exists in our Elk Valley play in British Columbia."
About Storm Cat Energy
Storm Cat Energy is an independent oil and gas company focused on the
pursuit, exploration and development of large unconventional gas reserves from
fractured shales, coal beds and tight sand formations. The Company has
producing properties in Wyoming's Powder River Basin, exploration and
development acreage in Canada and Alaska, and high-risk, high-reward
exploration acreage in Mongolia. The Company's shares trade on the American
Stock Exchange under the symbol "SCU" and in Canada on the TSX Venture
Exchange under the symbol "SME."
By Order of the Board of Directors
Storm Cat Energy Corporation
/s/ J. Scott Zimmerman
President and Chief Executive Officer
Forward-looking Statements
CAUTIONARY STATEMENT: This publication contains certain "forward-looking
statements", as defined in the United States Private Securities Litigation
Reform Act of 1995 relating to matters such as the Company's drilling and
other exploration plans, and projected well economics. Forward-looking
statements are statements that are not historical facts; they are generally,
but not always, identified by the words "expects," "plans," "anticipates,"
"believes," "intends," "estimates," "projects," "aims," "potential," "goal,"
"objective," "prospective," and similar expressions, or that events or
conditions "will," "would," "may," "can," "could" or "should" occur. Forward-
looking statements are based on the beliefs, estimates and opinions of Storm
Cat's management on the date the statements are made; they involve a number of
risks and uncertainties. Consequently, there can be no assurances that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Storm Cat
undertakes no obligation to update these forward-looking statements if
management's beliefs, estimates or opinions, or other factors, should change.
Factors that could cause future results to differ materially from those
anticipated in these forward-looking statements include, but are not limited
to the volatility of natural gas prices, the possibility that exploration
efforts will not yield economically recoverable quantities of gas, accidents
and other risks associated with gas exploration and development operations,
the risk that the Company will encounter unanticipated geological factors, the
Company's need for and availability of additional financing, the possibility
that the Company may not be able to secure permitting and other governmental
clearances necessary to carry out the Company's exploration and development
plans, and the other risk factors discussed in greater detail in the Company's
various filings on SEDAR with Canadian securities regulators and its filings
with the U.S. Securities and Exchange Commission, including the Company's Form
20-F dated July 1, 2005.
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY
FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
