CALGARY, ALBERTA--(Marketwire - Feb. 23, 2011) - Orleans Energy Ltd. ("Orleans" or the "Company") (TSX:OEX) is pleased to announce that the Company has closed the previously-announced disposition of its deep mineral rights at Kaybob in West Central Alberta to an arm's-length party for $10.7 million (the "Deep Rights Disposition"). The Deep Rights Disposition involved the sale of the Company's undeveloped, non-producing deep mineral rights Below Base Mississippian in 17 working interest sections (10,880 net acres). The strategic rationale in support of the Deep Rights Disposition included the following:

  • Facilitates the reinvestment of funds into Orleans' Waskahigan Montney oil play, wherein preliminary project economics provide for anticipated project payout or capital recovery in less than one year (at current commodity price levels);
  • Industry exploration of new, deeper formations including the Duvernay Shale in West Central Alberta is very early-stage with a significant amount of geological evaluation required to "test" these play concepts for productivity and economic commerciality;
  • Deeper formation exploration is capital intensive requiring significant levels of capital investment beyond Orleans' cash flow generating capabilities; 
  • Of the disposed deep mineral rights, 15.5 working interest sections of the associated leases and licences were set to expire in 2011; and,
  • Eliminated the required 2011 capital investment to continue the deep rights licenses in 13.5 sections.

Proceeds from the Deep Rights Disposition have been applied against outstanding bank debt, which has resulted in a current positive cash balance of $5.4 million, and will assist in the funding of Orleans' 2011 capital investments. The Deep Rights Disposition did not result in a decrease to the existing $60 million borrowing base associated with the Company's bank credit facility.

Orleans Energy Ltd. is a Calgary, Alberta-based crude oil and natural gas company, with common shares trading on the Toronto Stock Exchange under the symbol "OEX". Orleans commenced active oil and gas operations in January 2005 and is committed to maximizing value for its shareholders through successful drilling of internally-generated prospects supplemented with strategic and focused property and/or corporate acquisitions. Orleans has several operated, high working interest, light oil and liquids-rich natural gas "resource plays" in West Central Alberta, specifically the Montney in Kaybob, Waskahigan and Ante Creek, along with the Wilrich in Pine Creek. 

The information in this news release contains certain forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "appear", "seek", "anticipate", "plan", "continue", "estimate", "approximate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "would" and similar expressions. These statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control, including: the impact of general economic conditions; industry conditions; changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced; fluctuations in commodity prices and foreign exchange and interest rates; stock market volatility and market valuations; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; uncertainties associated with estimating oil and natural gas reserves; competition for, among other things, capital, acquisitions, of reserves, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry ; geological, technical, drilling and processing problems and other difficulties in producing petroleum reserves; and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that the Company will derive from them. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Contact Information: Orleans Energy Ltd.
Barry Olson
President & CEO
(403) 215-2941
Orleans Energy Ltd.
Dean Bernhard
Vice President, Finance & CFO
(403) 215-2945
Orleans Energy Ltd.
Head office: Suite 1200, 500-4th Avenue S.W.
Calgary, Alberta, T2P 2V6
(403) 261-8850 (FAX)