TORONTO, Jan. 28, 2005 (PRIMEZONE) -- Canary Resources, Inc. ("Canary") (Pink Sheets:SKHR), a Nevada Corporation, is pleased to announce that it has executed definitive farm-out agreements relating to development of the Forest City Basin in conjunction with Osborn Energy, LLC ("Osborn Energy"). Canary, a coalbed methane (CBM) company, is focused on the Forest City Basin which is an emerging CBM play in Kansas and Missouri.
Highlights of the Farm-Out Agreement include:
-- Canary becomes the operator and owner of a 75% working interest in Osborn Energy's entire undeveloped land position of approximately 76,869 acres, in exchange for funding all drilling activity. A 25% working interest is retained by Osborn Energy in exchange for its land position. It is expected that this acreage will yield over 1,800 drill locations.
-- Canary and Osborn Energy have defined an Area of Mutual Interest, which encompasses the 76,869 acres, of approximately 400,000 acres in Johnson, Miami and Linn Counties in North Eastern Kansas, and in Cass and Bates Counties in West Central Missouri.
-- Canary, as operator, has contracted Osborn Energy's seasoned field team to commence an ambitious drilling program around existing infrastructure.
James Beatty, CEO of Canary Resources, Inc. commented, "We are fortunate to have a partner in Osborn Energy, the most experienced explorer and operator in the Forest City Basin, and the first company with commercial gas production. Osborn Energy's extensive investment in field-testing and research into drilling, completion, and production techniques provide a major competitive advantage for Canary Resources which mitigates exploration and development risk."
THIS NEWS RELEASE DOES NOT CONSTITUTE ANY OFFER OF ANY SECURITIES FOR SALE.
About Canary Resources, Inc.
Canary Resources, Inc. was incorporated under the laws of the State of Delaware for the purpose developing its acreage in Coalbed Methane Gas. Canary Resources, Inc. is a coalbed methane company which is developing over 75,000 acres in the Forest City Basin in Kansas and Missouri. Coalbed methane (CBM) is natural gas or methane that occurs in coal beds and has been generated during the conversion of plant material to coal. Although minor differences in geologic conditions alter production methods, coalbed methane is transported, sold, and used in a similar way to natural gas produced from conventional gas and petroleum fields.
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This Press Release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect our current belief and are based upon currently available information. Accordingly, such forward looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. We undertake no obligation to update or advise in the event of any change, addition or alteration.