Pearl Exploration and Production Ltd.



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  Aug 23, 2007 - 13:26 ET
Pearl Announces the Acquisition of a Large Heavy Oil Project in Alberta

  CALGARY, ALBERTA--(Marketwire - Aug. 23, 2007) - Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX VENTURE:PXX)(FIRST NORTH:PXXS) announces that in conjunction with its Joint Venture partner, Serrano Energy Ltd. ("Serrano"), the Company has acquired a 35% working interest in 2,816 contiguous hectares of oil sands leases located south of Fort McMurray, in the Athabasca Oil Sands region of northern Alberta. The Athabasca Oil Sands comprise what is considered one of the largest oil deposits in the world and is the heart of Canada's oil industry.

DeGolyer and MacNaughton Canada Limited, independent reserves evaluator, prepared a report in accordance with National Instrument 51-101 guidelines on these Alberta oil sand leases with an effective date of December 31, 2006. In this report DeGolyer and MacNaughton estimated that Pearl's working interest share of possible oil reserves within these leases was approximately 88 million barrels of possible recoverable oil reserves, effectively tripling Pearl's possible reserves. The 10% discounted value for these newly acquired reserves is approximately CAD$105,000,000 (net to Pearl) using forecast pricing and before taxes.

Through its 28.27% ownership in Serrano, Pearl has an additional indirect ownership of 24.8 million barrels of possible oil reserves and an additional 10% discounted value for these reserves of approximately $29,683,500.

The Company has plans to drill one appraisal well this winter and is in the process of preparing an application for required governmental approvals of a thermal pilot project utilizing SAGD technology. Upon confirmation of positive results from this appraisal well, Serrano as operator plans to initiate the SAGD single well pair pilot project commencing in the fall of 2008, pending regulatory approvals. Estimated drilling and facility costs of the SAGD pilot project are estimated to be $15,000,000 ($5,250,000 net to Pearl).

For the balance of 2007 Pearl and Serrano have plans to drill up to 50 additional wells in their Joint Venture heavy oil conventional focus area in Saskatchewan, commencing in early September.

Pearl President and CEO Keith Hill stated, "We are very pleased to add this large scale heavy oil property to Pearl's portfolio as a result of our investment in Serrano. We will aggressively pursue the SAGD pilot project which is the key to moving the possible reserve numbers into a proven and probable category."

Pearl is a public company focused on delivering disciplined growth by establishing a North American portfolio of oil and gas projects with an emphasis on large resource opportunities. Additional information on Pearl is available on our website at www.pearleandp.com.

The company's Certified Advisor on First North is E. Ohman J:or Fondkommission AB.

All references in this release to boe's are based on a 6 to 1 conversion ratio. Boe's may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Significant Assumptions and Uncertainties:

The preceding information presents values that are estimated for possible reserves (as defined in the Canadian Oil and Gas Evaluation Handbook) using costs and prices in C$ obtained from sources considered to be reasonable by the Corporation and the reserves evaluator, DeGolyer and MacNaughton.

Possible reserves are those additional reserves that are less certain to be recovered than probable reserves. There is only a 10% probability that the quantities actually recovered will equal or exceed the sum of the proven plus probable plus possible reserves.

The process of estimating reserves is complex requiring significant judgments and decisions based on available geological, geophysical, engineering and seismic data. Although every reasonable effort is made to ensure that reserve estimates are accurate, reserve estimation is an inferential science. As a result, the subjective decisions, new geological or production information and a changing environment may impact these estimates and the impact could be material.

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.

Forward-looking statements: This document contains statements about expected or anticipated future events and financial results that are forward-looking in nature and as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the Company's capability to execute and implement its future plans. Actual results may differ materially from those projected by management. For such statements, we claim the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995.



The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION PLEASE CONTACT:


Pearl Exploration and Production Ltd.
Keith Hill
President and Chief Executive Officer
(604) 689-7842
(604) 689-4250 (FAX)
Email: khill@namdo.com

or

Pearl Exploration and Production Ltd.
Arlene Weatherdon
Chief Financial Officer
(403) 716-4054
(403) 265-8324 (FAX)
Email: arlene.weatherdon@pxx.ca

or

Pearl Exploration and Production Ltd.
Sophia Shane
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
Email: sophias@namdo.com
Website: www.pearleandp.com
 
 

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