SAN DIEGO, March 5, 2007 (PRIME NEWSWIRE) -- Surge Global Energy, Inc. (OTCBB:SRGG) ("Surge" or the "Company") and its wholly owned operating subsidiary, Cold Flow Energy, ULC ("Cold Flow") are pleased to announce the closing of the acquisition of Peace Oil Corp. ("Peace Oil"), a privately owned oil sands company located in Alberta, Canada. Peace Oil owns an undivided 30% working interest in 135 square miles or 86,400 acres (net 40.5 sections or 25,920 acres) of oil sands leases in the Red Earth area of Alberta (the "Red Earth Leases"), consisting of four major contiguous blocks located in close proximity to existing services and infrastructure. A technical review report dated June 30, 2006, prepared by Sproule Associates Limited, an independent engineering firm, estimated that the Red Earth Leases contain resource potential of up to 2.5 billion barrels of Original Bitumen in Place (OBIP) (net Surge working interest is estimated to be up to 750 million barrels OBIP). North Peace Energy Corp (TSX-V:NPE) owns the remaining 70% working interest and is the operator for the Red Earth Leases.
Under the terms of the Agreement, the shareholders of Peace Oil will receive CN$6.6 million and 8,965,390 shares of preferred stock ("Preferred Shares") of Cold Flow valued at CN$10 million. Each whole Preferred Share may be exchanged for two Surge common shares for a period of five years. To date Surge has paid $1.0 million in cash and the remaining CN$5.6 million has been funded with a 7% secured debenture, payable in four installments with the final payment due on December 31, 2007. In addition, the Company has granted the debenture holder one million Surge warrants with a $1.00 exercise price and three-year term. Details of the acquisition will be included in Surge's 8-K Form to be filed with the Securities Exchange Commission.
David Perez, CEO and Chairman of Surge, said, "This is a significant acquisition for Surge. It is an enormous increase to our original oil in place base. We look forward to developing the Red Earth Leases to maximize their value for the benefit of our investors, and continue on our path to building a world-class oil sands company."
With this acquisition, Surge has one of the largest footprints among juniors in the Peace River and Athabasca oil sands regions, with 49 net sections of land in two key areas. The properties have primary (cold flow) and secondary (in-situ thermal) recovery potential, which Surge intends to validate and refine through the drilling of additional delineation and exploration wells.
About Surge Global Energy, Inc.
Surge Global Energy, Inc., located in San Diego, California intends to aggregate and exploit an estimated one billion (net equity and working interest) of net recoverable reserves in oil sands properties in the Peace River and Athabasca regions of Alberta, Canada. For more information on Surge please visit www.SurgeGlobalEnergy.com.
The Surge Global Energy, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2471
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include the statements regarding the Company's expectations, hopes or intentions regarding the future, including, but not limited to, general economic conditions, market and business conditions; potential production and industry capacity and estimates. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. Additional risks and uncertainties include the possibility that Surge will not discover bitumen, oil or gas in the quantities the Company currently anticipates. To fund the probable and proven reserve development cost effort, Surge and Cold Flow anticipate raising a significant amount of capital which will result in substantial future dilution to existing shareholders. Other risks and uncertainties of the Company's business could cause actual results to differ and are discussed under the heading "Risk Factors" and in other sections of the Company's SB-2/A filed with the SEC on May 24, 2006 and February 14, 2007, the Company's Form 10-K for the 2005 fiscal year and in the Company's other periodic reports filed from time to time with the SEC. All forward-looking statements in this document are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statements.