Saccharum Executes Agreement with Oil Reserve Inc., Announces Private Placement

Saccharum Executes Agreement with Oil Reserve Inc., Announces Private Placement

Calgary, Alberta CANADA, April 03, 2013 /FSC/ - Saccharum Energy Corp. (SHM - TSX Venture), ("Saccharum") announced today that it has negotiated and executed a farm-out and option agreement with Oil Reserve Inc. ("Oil Reserve") on a minimum of four sections of oil sands lands located in Oil Reserve's Athabasca area of Alberta.  Oil Reserve holds oil sands rights from below the top of the Viking formation to the base of the Woodbend Group in 151 generally contiguous sections in the Nixon area (the "Farmout Lands").

Saccharum has committed to a two well test and core program to be completed on or before October 31, 2013, subject to reasonable surface access, regulatory approval and drilling rig availability.  The two wells will be spudded on two separate sections of Oil Reserve land and will drill, cut and core through the Viking formation.  By completing this initial well program, Saccharum will earn a 50% interest in the two sections drilled as well as a 50% interest in two additional adjacent or offsetting sections of Farmout Lands, such lands to be determined by Saccharum at its sole discretion.  In addition to this two well commitment, the agreement also provides Saccharum with a rolling option to drill up to eleven additional earn-in wells on any of the unearned Farmout Lands.  For each completed option well, Saccharum will earn a 50% interest in the section drilled as well as a 50% interest in two additional adjacent or offsetting sections of Farmout Lands.  In return for completing the entire option well drilling program, Saccharum shall have earned the right to participate jointly with Oil Reserve in the drilling of a SAGD test well at a mutually agreed location on the Farmout Lands.  With the completion of that SAGD test well, Saccharum shall have earned a 50% interest in all 151 sections of Farmout Lands which is subject to the farm out agreement, which lands include zones in the Nisku and Grand Rapids formations.

Management of the Company anticipates that any reasonable measure of success at these locations will allow it to aggressively develop what may be a significant accumulation of hydrocarbon on the sections and in the area in general.

OIL RESERVE

Oil Reserve is a private Western Canadian oil development company with a land position in the carbonate trend of Northern Alberta.  Within the carbonate trend the Company holds 297 sections (8.25 Townships/190,080 acres) in the Peace River area which include the Debolt, Elkton and Pekisko formations.  Additionally, Oil Reserve holds 621 sections (17.25 Townships/397,440 acres) of land in the Athabasca area which includes the Grosmont and Nisku formations.  For further information, see www.oilreserveinc.com.

The Viking formation in the Nixon area of Alberta is a thick channel sand present on the Farmout Lands.  Based on the Report (as defined below), potential reservoir zones on the Farmout Lands average 34 metres of gross thickness, with 32 percent porosity, and 43 percent water saturation.  Intervals within the Viking appear to be hydrocarbon charged in many areas of the property based on volumetric calculation, and drill stem test recovery.  One metre of heavy oil was tested from 3-9-75-23W4 well and the 16-19-72-18W4 well located on Farmout Lands recovered oil cut mud.  The Viking formation depth ranges from 219-310 metres TVD.


To view the table mentioned in the paragraph below, click onto the following link:
http://www.usetdas.com/maps/saccharum/saccharumapr3002.gif  ;


The foregoing table is an excerpt from a NI 51-101 compliant resource report dated March 31, 2012 (the "Report") prepared for Oil Reserve by Deloitte and Touche LLP, an independent, qualified reserves evaluator.  A copy of the full Report is available at the Oil Reserve website, www.oilreserveinc.com. Readers are cautioned that resources are not reserves, and there is no certainty that it will be commercially viable to produce any portion of the discovered resources, nor that any portion of the undiscovered resources will be discovered or, if discovered, that it will be commercially viable to produce any portion of the resources.  Defined terms have the respective meanings ascribed to such terms in the "Canadian Oil and Gas Evaluation Handbook" prepared jointly by The Society of Petroleum Evaluation Engineers (Calgary Chapter) and the Canadian Institute of Mining, Metallurgy & Petroleum (Petroleum Society) as amended from time to time, including:

"Prospective Resources" means those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.  Prospective resources have both an associated chance of discovery and a chance of development.

"Discovered PIIP" or "discovered petroleum initially-in-place" means that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production.  The recoverable portion of discovered petroleum initially-in-place includes production, reserves and contingent resources; the remainder is unrecoverable.

"Total PIIP" or "total petroleum initially-in place" means that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations.  It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered.

"Undiscovered PIIP" or "undiscovered petroleum initially-in-place" means that quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered.  The recoverable portion of undiscovered petroleum initially-in-place is referred to as prospective resources; the remainder is unrecoverable.

FACTS AND STATISTICS REGARDING OILSANDS IN ALBERTA

The following information was recently obtained from www.alberta.ca, a website maintained by the Government of the Province of Alberta:
Alberta ranks third, after Saudi Arabia and Venezuela, in terms of proven global crude oil reserves.  In 2011, Alberta's total proven oil reserves were 170.2 billion barrels, or about 11 percent of total global oil reserves (1,523 billion barrels).

Almost all of Alberta's proven oil reserves are found in Alberta oil sands.  Of Alberta's total oil reserves 168.7 billion barrels, or about 99 percent, come from the oil sands, and the remaining 1.5 majority (about 98 percent) of Canada's oil reserves.

In 2011, Alberta exported about 1.3 million barrels per day (bbl/d) of crude oil to the United States (U.S.), supplying 15 percent of U.S. crude oil imports, or 7 percent of U.S. oil demand.  Total oil consumption for the U.S. in 2011 was 18.9 million BBL/d. Canada as a whole exported 2.23 million bbl/d of crude oil to the U.S., or about 25 percent of the U.S. total crude oil imports in 2011.

In the fiscal year 2011/12, the Alberta government collected about $4.5 billion in royalties from oil sands projects.  This was the third fiscal year in a row when oil sands royalty was the top source of Albert's non-renewable resource revenue.

Oil sands investment increased to $17.2 billion in 2010, a 63 percent increase from $10.6 billion in 2009.  In 2011, oil sands investment has been projected to further increase to $21.6 billion.

PRIVATE PLACEMENT

In connection with the farmout arrangement, Saccharum intends to sell, by way of a non-brokered private placement, up to 6,666,667 listed common shares on a "flow through" basis at $0.15 per share to raise up to $1,000,000.  It is anticipated that these shares will be acquired primarily by directors, officers and strategic stakeholders associated with Oil Reserve.  It is not anticipated that any commissions or finder's fees will be paid in connection with the placement of the shares.  Proceeds of the private placement will be used in connection with Saccharum completing the first two test wells on the Farmout Lands.  The private placement is subject to, among other things, the receipt of all required regulatory approvals.

SACCHARUM

Saccharum is a growing junior company with a variety of oil and gas interests in Alberta and is managed by a team which has recently completed the sale of another oil and gas company. Saccharum's participation in the Oil Reserve farm-out agreement represents an opportunity to expand its holdings in northern Alberta and are but part of a growing portfolio of oil and gas exploration and development opportunities being pursued and acquired by the Company.
  
For further information regarding Saccharum Energy Corp., please refer to the Company's filings available on SEDAR (Http://www.sedar.com) or the following contacts:

Johannes Kingma, President (403) 612-5655
David Pinkman, CFO (403) 863-6034

General Disclaimer

Saccharum and its management have taken all reasonable care in producing and publishing information contained in this news release, and will endeavor to do so on a periodic basis. Material in this news release may still contain technical or other inaccuracies, omissions, or typographical errors, for which Saccharum assumes no responsibility. Nor does Saccharum warrant or make any representations regarding the use, validity, accuracy, completeness or reliability of any claims, statements or information on this site. Under no circumstances, including, but not limited to, negligence, shall Saccharum be liable for any direct, indirect, special, incidental, consequential, or other damages, including but not limited to, loss of programs, loss of data, loss of use of computer of other systems, or loss of profits, whether or not advised of the possibility of damage, arising from your use, or inability to use, the material from this news release. The information is not a substitute for independent professional advice before making any investment decisions. Furthermore, you may not modify or reproduce in any form, electronic or otherwise, any information on this site, except for personal use unless you have obtained our express written permission.

Forward-Looking Statements
This news release may contain forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view this press release as a PDF file, click onto the following link:
http://www.usetdas.com/pr/SaccharumApr3.pdf



Source:  Saccharum Energy Corp. (TSX-V)
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