CALGARY, Dec. 7 /CNW/ - Upper Lake Oil and Gas Ltd. (TSX:UP) ("Upper Lake" or the "Company") is pleased to provide an update on its current operations. Since inception on October 15, 2007, Upper Lake has participated in the drilling of three wells, all of which are in various stages of completion, testing or being tied-in. Depending on weather and surface access, Upper Lake expects to participate in the drilling of up to three additional wells prior to year end, including one well currently being drilled in the Tupper region of British Columbia.
Certain information included in this News Release constitutes forward-looking information, including information concerning the number of wells in which the Company expects to participate prior to the end of 2007 and the anticipated timing for tie-in of, and first production from, the 15-04-43-28w4 well recently drilled by the Company at Ferrybank. Readers should review the cautionary statement that appears at the end of this News Release.
Upper Lake is also pleased to announce that it has discovered a new gas pool in its Ferrybank, Alberta core area. The 12-01-43-28 w4 well (48.15% working interest), which was drilled as an extension to the Company's Glauconite gas pool, encountered an additional zone. The well has been completed as a dual zone gas well and both zones are now on production. Also at Ferrybank, Upper Lake has drilled and completed a pool extension oil well. The 15-04-43-28 w4 well (100% working interest) initially tested light gravity crude oil and associated solution gas at substantial rates. An extended test is underway and Upper Lake plans to have this well tied in and on production in mid January 2008. Upper Lake expects to provide 2008 guidance, including rates for these recently drilled Ferrybank wells, in late January 2008.
Upper Lake remains debt free, has a revolving credit line of $8 million and a preliminary 2008 capital program of between $9 and $12 million.
Upper Lake Oil and Gas is a Calgary-based company active in the exploration, development and production of oil and gas in Western Canada. The Company was formed on October 12, 2007 when shareholders, optionholders and warrantholders of Diamond Tree Energy Ltd. ("Diamond Tree") approved an arrangement involving Upper Lake, Diamond Tree and Crocotta Energy Inc. ("Crocotta") at a special meeting. In connection with the arrangement, certain oil and gas properties of Diamond Tree in central and eastern Alberta, consisting of exploration assets, producing properties, related tangibles and undeveloped lands, were transferred to Upper Lake. Additional information concerning Upper Lake is available on SEDAR at www.sedar.com.
Certain information set out in this News Release constitutes forward-looking information. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "believe" and similar expressions. Forward-looking statements are based upon the opinions and expectations of management of the Company as at the effective date of such statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that those expectations will prove to have been correct. Forward-looking statements are subject to certain risks and uncertainties that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. These factors include, but are not limited to, such things as the volatility of prices for oil and gas and other commodities, commodity supply and demand, fluctuations in currency and interest rates, inherent risks associated with the exploration and development of oil and gas properties, ultimate recoverability of reserves, unexpected declines in production from established reserves, timing, results and costs of exploration and development activities, timing and costs of facilities and pipeline construction, availability of financial resources or third-party financing, availability of drilling and related equipment and new laws and regulations (domestic and foreign). Accordingly, readers should not place undue reliance upon the forward-looking statements contained in this News Release and such forward-looking statements should not be interpreted or regarded as guarantees of future outcomes. Forward-looking information respecting anticipated drilling activities for the balance of 2007 is based upon the current capital budget developed for the Company (which is subject to change), prior exploration and development drilling activities conducted by Diamond Tree Energy Ltd., the results of prior exploration and development drilling activities in the Ferrybank area, the receipt of all necessary regulatory approvals in a timely manner and industry conditions including proposed royalty changes. Forward-looking information respecting the anticipated timing for tie-in of, and first production from, the 15-04-43-28 w4 well recently drilled by the Company at Ferrybank is based upon management's prior experiences with the tie-in of successful wells in the Ferrybank area, the availability of transportation and processing infrastructure. The forward-looking statements of Upper Lake contained in this News Release are expressly qualified, in their entirety, by this cautionary statement. Additional information concerning the various risk factors to which Upper Lake is exposed in the conduct of its business (and which may affect the expectations or outcomes reflected in the forward-looking statements contained in this News Release) are described in publicly available documents filed by or on behalf of Upper Lake with certain securities regulatory authorities in Canada, which are available through SEDAR at www.sedar.com, including the September 12, 2007 Management Information Circular and Proxy Statement prepared by Diamond Tree Energy Ltd. in connection with the special meeting of the securityholders of Diamond Tree Energy Ltd. held on October 12, 2007.