Flagship Energy Inc. ("Flagship" or the
"Company") is pleased to provide an operational update for the second quarter
of 2007. Based on field estimates, production for the quarter was
approximately 1,750 BOEPD. An additional 150 BOEPD of tested production
remains awaiting tie-in in the Buck Lake area (Crystal and Golden Spike). The
previously announced Leduc new pool discovery at Wood River in central Alberta
(0.33 net well) is now expected to be producing light oil by the end of
September due to pipelining delays. The first quarter 2007 gas discoveries at
Brightsand in western Saskatchewan remain shut-in awaiting area
infrastructure. The first quarter discovery at Buffalo Head in southeast
Saskatchewan is on stream but the newly-tied in well at Corbett requires
remedial work and cannot currently be accessed due to wet conditions.
During the second quarter, Flagship drilled one new pool wildcat well
(75%W.I.) at Alsask in southern Alberta. Completion operations on the well are
scheduled to begin next week. Flagship has finished drilling a new pool
wildcat well at Provost, Alberta this week (100% W.I.) that has been cased for
further evaluation. Three additional exploratory wells are currently in the
licensing or surface acquisition phase in the Windfall and Buck Lake areas of
Alberta with drilling expected over the next two months. The planned 3D
seismic program at Pembina, Alberta is currently underway and completion is
expected by early August. The program is being shot to evaluate the potential
for Nisku drilling targets on owned or optioned land in the Crossfire area of
this developing light oil play. The two farmout wells on Flagship lands in
this area where the Company retains a significant carried working interest are
currently in the licensing process. One well is expected to commence drilling
before the end of August and the other well is now expected to commence later
in the year due to regulatory delays.
Flagship is an emerging oil and gas company focused on the acquisition,
exploration, exploitation and development of oil and natural gas in Western
Canada. Flagship's business plan is to grow reserves and production to
increase shareholder value through a focused and balanced exploration program,
strategic acquisitions and value-added exploitation.
The Company has 31,613,495 Class A shares and 5,149,869 Class B shares
issued and outstanding which trade on the TSX Venture Exchange under the
symbols "FG.A" and "FG.B". The Class B shares are convertible, at the option
of the Company, at any time after December 31, 2008 and before December 31,
2010, into Class A shares. The conversion rate is calculated by dividing $10
by the greater of $1 and the then current market price of the Class A shares.
If conversion has not taken place by December 31, 2010, the Class B shares
become convertible, at the option of the shareholder, into Class A shares on
the same basis. Effective February 1, 2011, all remaining Class B shares will
be deemed to be converted to Class A shares on the same basis.
ADVISORY: Certain information regarding Flagship Energy Inc. in this news
release including management's assessment of future plans and operations,
reserve and production estimates, drilling inventory and wells to be
drilled, timing of drilling and tie in of wells, productive capacity of
new wells, capital expenditures and timing thereof, may constitute
forward-looking statements under applicable securities laws and
necessarily involve risks including, without limitation, risks associated
with oil and gas exploration, development, exploitation, production,
marketing and transportation, loss of markets, volatility of commodity
prices, currency fluctuations, imprecision of reserve estimates,
environmental risks, competition from other producers, inability to
retain drilling rigs and other services, incorrect assessment of the
value of acquisitions, failure to realize the anticipated benefits of
acquisitions, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from
internal and external sources. As a consequence, actual results may
differ materially from those anticipated in the forward-looking
statements. Readers are cautioned that the foregoing list of factors is
not exhaustive. Additional information on these and other factors that
could affect Flagship's operations and financial results are included in
reports on file with Canadian securities regulatory authorities and may
be accessed through the SEDAR website (www.sedar.com), or Flagship's
website (www.flagshipenergy.ca).
Furthermore, the forward-looking statements contained in this news
release are made as at the date of this news release and Flagship does
not undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities laws.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
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