BRIDGEWATER, Nova Scotia, Aug. 8, 2001 (PRIMEZONE) -- Osprey Energy (CDNX:OEL) is pleased to announce the signing of a letter of intent with one of the world's largest natural gas producers, to sell its three Northern Louisiana wells. These wells are part of the twelve wells included in the Cotton Valley Project, which Osprey purchased from Union Pacific Resources in June of 2000. In consideration, Osprey will receive US$1,800,000, three oil and gas wells, and three salt-water disposal wells. The Company will also receive a five year "right of first refusal" for the purchase of any wells in a significant Louisiana field that the major deems to be non-core.
Osprey will also have access to the major's salt-water disposal facilities to serve five wells from which water is now transported by truck. The operating costs of these wells, the Crowell 3, Crowell 7, Bailey 32, Temple 16, and Crosby 24, will be significantly reduced once salt-water disposal facilities are available.
By divesting its only northern Louisiana holdings in exchange for properties in central Louisiana Osprey also obtains added efficiencies in consolidating its largest operating base in one area of the state.
The proceeds from the sale will be used primarily for remedial work on other company wells in Louisiana. The transaction is expected to close on or before Aug. 30, 2001.
Osprey management will host a conference call for the financial markets, advisors and shareholders on Thursday, Aug. 9. The call will begin at 11 a.m. EST, and may be reached up to ten minutes in advance of the start time by dialing Toll Free 1-800-346-7359. Those outside of North America may join by dialing 973-528-0008. Management will make opening remarks concerning recent developments and will then open the lines for questions. All are encouraged to attend the call.
Osprey Energy is an emerging Canadian junior oil and gas company with producing properties in Louisiana and Alberta and exploration prospects in Alberta, Prince Edward Island and Nova Scotia. For more detailed information regarding the Company please visit our Website at: www.ospreyenergy.com .
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 or its contents. The CDNX neither approves nor disapproves of this news release". WARNING: The Company relies on litigation protection for "forward-looking" statements.