Eaglewood Energy Enters Farm-Out Agreement on PPL 259 and Receives Interest in PRL 5

CALGARY, ALBERTA--(Marketwire - June 3, 2009) - Eaglewood Energy Inc. ("Eaglewood") (TSX VENTURE:EWD) wishes to announce that it has entered into a binding farm-out agreement in respect of PPL 259, one of Eaglewood's four exploration licenses in Papua New Guinea ("PNG"). The farm-out agreement is with Mega Fortune International Limited ("Mega"), a wholly-owned subsidiary of P3 Global Energy ("P3GE"). P3GE is a member of the privately held, Thailand-domiciled PK Group, a mining, energy, and power generation group of companies with businesses in seven countries across three continents. P3GE's core businesses are exploration and production of oil and natural gas, gas transmission and distribution including LNG, and non-conventional energy technology applications. PK Group has extensive experience in construction of large infrastructure projects including onshore oil and natural gas pipelines.

Eaglewood currently holds 100 percent interest in PPL 259, which is located in the Fly Platform of the Papuan Basin in PNG. A resource study of the natural gas potential of PPL 259 was undertaken on behalf of Eaglewood by Fekete Associates Inc. of Calgary, Alberta, Canada ( "Fekete" ), an independent qualified reserves evaluator, as at June 30, 2008. The report indicates that the gross undiscovered resources of natural gas in place ranges from a low of 345 BCF to a high of 1,515 BCF with a mean of 866 BCF.

These estimates are based upon three existing wells on Petroleum Retention Licenses 4 and 5 ("PRL 4" and "PRL 5"), log parameters, structural features, degree of faulting, and depth estimated from depth structure maps. Undiscovered resources are those quantities of oil and natural gas estimated on a given date to be contained in accumulations yet to be discovered. There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

Under the terms of the farm-out agreement, Eaglewood will receive US$15,000,000 and a 25.103 percent interest in PRL 5 from Mega in exchange for a 65 percent interest in PPL 259. Mega will fund up to US$20,000,000 of the cost of drilling Ubuntu-1, the first exploration well in PPL 259, by December 31, 2009 and will fund up to US$20,000,000 to drill a well in PRL 5 by December 31, 2010. PRL 5 is located in the middle of PPL 259 and contains the Elevala and Ketu natural gas and natural gas liquids discoveries. Eaglewood will also receive an option to acquire up to a 10 percent interest in PRL 4 from Mega. PRL 4 is located in the north western corner of PPL 259 and contains the Stanley natural gas and natural gas liquids discovery.

The co-venturer in PRL 5, Horizon Oil Ltd., has reported that RISC Pty Ltd. of West Perth, Australia, ("RISC") an independent qualified reserves evaluator, had carried out a technical review of the PRL 4 and PRL 5 assets and confirmed effective April 2009 that PRL 5 contained gross contingent resources of 408 BCF (mean) of natural gas and 25 MMB (mean) of natural gas liquids and that PRL 4 contained gross contingent resources of 283 BCF (mean) of natural gas and 9 MMB (mean) of natural gas liquids. Contingent resources are those quantities of oil and natural gas estimated on a given date to be potentially recoverable from known accumulations but are not currently economic. There is no certainty that it will be commercially viable to produce any portion of the resources.

Upon completion of the PPL 259 farm-out agreement, Eaglewood will pay a finder's fee of up to US$3,750,000 to Metropower Asia Limited, a private energy and minerals advisory services company headquartered in Hong Kong.

The farm-out agreement is subject to PNG Government approval.

Eaglewood's CEO Brad Hurtubise commented:

"This transaction is truly transformational for Eaglewood. It brings us a 25 percent interest in two proven gas discoveries and, an option to acquire 10 percent of another proven gas discovery, both within the footprint of our PPL 259 license. This will allow us and our partners in the licenses to develop and commercialize the total resource in a coordinated and integrated way. P3GE brings a lot of mid-stream, construction and pipeline experience to complement our upstream exploration and drilling expertise and we are looking forward to working with them. Upon Government approval of this transaction and the previously announced farm-out of PPL 260, Eaglewood will have over $10 million in cash and be carried on the costs of two wells and 90 percent of a third well, all of which could be drilled in the next 18 months."

Forward-Looking Statements

This document may contain "forward-looking statements" within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this document and Eaglewood does not intend, and does not assume any obligation, to update these forward-looking statements.

Forward-looking statements relate to future events or future performance and reflect management of Eaglewood's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" or the negative of these terms or comparable terminology. By their very nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Eaglewood to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of resources; possible variations in ore reserves, grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors detailed from time to time in Eaglewood's interim and annual financial statements and management's discussion and analysis of those statements, all of which are filed and available for review on SEDAR at www.sedar.com. Although Eaglewood has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Accordingly, readers should not place undue reliance on forward looking statements.



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