BRIDGEWATER, Nova Scotia, Canada, June 28, 2001 (PRIMEZONE) -- Osprey Energy (CDNX:OEL) has finalized the terms of an agreement with CMB Energy for the acquisition of a 10% working interest (WI) in seven onshore natural gas and methane exploration permits encompassing approximately 640,000 acres on Prince Edward Island (PEI). Osprey also has the option to acquire an additional 15% WI over the next 120 days. Upon exercise of the option, Osprey will increase its net holdings from 64,000 acres to in excess of 160,000 net acres in a province of growing exploration appeal. This agreement, for which a consulting fee will be paid, is subject to final due diligence by the Company and regulatory approval.
A seismic program to confirm earlier seismic showings, and more precisely define drilling targets, is in the final planning stages. The objective is to drill at least one well in PEI over the next 12 months.
In Nova Scotia, Osprey already holds a 15% WI, with the option for another 10%, in a 220,000-acre onshore tract north of Truro. A seismic program to verify targets identified in an earlier seismic program for drilling within the next year is beginning next week near Debert, and will extend about 65 kilometers to the Parrsboro area. The hydrocarbon potential defined by the initial seismic indicates potential reserves of more than 75 million barrels of oil and more than 345 million cubic feet of natural gas.
Both the PEI and Nova Scotia exploration plays are in the Maritime Basin, a large sedimentary formation of 57,000 square miles that includes parts of the three Maritime Provinces and the Gulf of St. Lawrence. The Basin is strikingly similar in age and geology to the present-day southern basin of the North Sea, which is rich in natural gas. The two basins were adjacent when formed more than 200 million years ago during the Carboniferous Period prior to the separation created by continental drift.
The pace of exploration in the Maritime Basin has accelerated in recent months as several players have identified potential gas deposits in different areas of the region. One well, recently drilled and cased on an adjoining property in PEI, will be tested over the next two to three weeks. Several companies have recently announced expanded exploration programs in the Maritime Basin. Another company has been active in both PEI and near Sussex, New Brunswick, where they have successfully tested two wells in a stratigraphic structure. An older Stony Creek discovery near Moncton, New Brunswick, produced nearly 30 BCF during its lifetime.
These Maritime Basin plays diversify Osprey's land holdings and complement its producing properties in Louisiana and Alberta.
ON BEHALF OF THE BOARD OF DIRECTORS OF
OSPREY ENERGY LTD.
"R. Gary Malone"
President
******
"This release was prepared by management who take full responsibility for its contents. The CDNX neither approves nor disapproves of this news release."
WARNING: The Company relies on litigation protection for "forward-looking" statements.