Press Releases

Symbol:  BOG: TSX Venture

CALGARY, March 28 /CNW/ - Base Oil and Gas Ltd. ("Base" or the "Company") is pleased to announce the financial and operating results for the year ended December 31, 2010 along with the 2010 year end reserves.  The Company has filed its reserve reports, financial statements and related management's discussion and analysis for the year ended December 31, 2010 on www.sedar.com.

HIGHLIGHTS

• Participated in three Earning Wells ("Earning Wells") under the South Pembina Joint Venture Drilling Program, earning an average working interest of 27.5% in 1,920 (528 net) acres of Cardium rights.
• Average production of 162 boe's/d in January and February 2011.
• Established bank credit facility up to $5.4 million effective March 24, 2011 comprised of $2.0 million revolving operating demand loan and $3.4 million acquisition/development loan.
• Increased proved plus probable reserves to 985.0 Mboe (36% oil and NGL's) and proved reserves to 689.5 Mboe (41% oil and NGL's).
• The net present value ("NPV") of Base's year end 2010 total proved plus probable reserves, at 10% discounted value before tax is $8.0 million.
• Base's estimated net asset value is $0.31 per basic share using (PVBT10) values on proved plus probable reserves.
• Maintained a long reserve index life of 13.5 years based on our 2010 exit production rate of 200 boe/d.
• Finding and development costs, including future development capital of $16.88 per boe on proved plus probable reserve additions and $21.98 per boe on total proved reserve additions.

 

FINANCIAL
($'s)
		Three Months Ended December 31				Year Ended December 31
		2010		2009		2010		2009
Oil and natural gas sales		259,514		45,787		418,851		45,787
Operating netback		129,602		19,537		102,096		12,380
Funds from operations		(10,434)		(115,314)		(263,794)		(305,859)
Net earnings (loss)		255,594		(49,251)		(297,342)		(277,594)
	Per share, basic & diluted	0.01		(0.01)		(0.01)		(0.04)
Capital expenditures		2,069,979		360,100		5,254,720		306,260
Working capital (net debt)		-		-		(1,785,142)		1,197,170
Common share issues		-		999,999		2,802,000		999,999
OPERATING
		Three Months Ended December 31				Year Ended December 31
		2010		2009		2010		2009
Daily Production
	Oil and NGL (bbls/d)	23		7		11		2
	Natural gas (mcf/d)	294		5		95		1
	Oil equivalent (boe/d @ 6:1)	72		7		27		2
Revenue
	Oil and NGL ($/bbl)	70.07		71.33		69.11		71.33
	Natural gas ($/mcf)	4.14		3.28		4.15		3.28
	Oil equivalent ($/boe @ 6:1)	39.27		65.60		42.91		65.60
Royalties
	$ per boe	(0.78)		(0.27)		(1.26)		(0.27)
Operating costs
	$ per boe	(18.88)		(37.34)		(31.19)		(47.59)
Netback
	$ per boe	19.61		27.99		10.46		17.74

 

RESERVES

The Company's reserves were independently evaluated by Sproule Associates Ltd. ("Sproule") as at December 31, 2010. The Sproule reports for the Company have been filed on www.sedar.com. The forecasts of product prices used in this evaluation were based on Sproule's December 31, 2010 price forecasts as detailed below:

Summary of Selected Price Forecasts

(Effective December 31, 2010)

Forecast Year	WTI Cushing Oklahoma (SUS/bbl)		Edmonton Par Price 40° API ($Cdn/bbl)		Alberta AECO-C Spot ($Cdn/MMBtu)		Henry Hub ($US/MMBtu)
2011	88.40		93.08		4.04		4.44
2012	89.14		93.85		4.66		5.01
2013	88.77		93.43		4.99		5.32
2014	88.88		93.54		6.58		6.80
2015	90.22		94.95		6.69		6.90
2016	91.57		96.38		6.80		7.00

WTI Cushing Oklahoma for 40° API, 0.4% Sulphur

Summary of Company Gross Reserves (Forecast Pricing) (1)

			As at December 31, 2010 (2)		As at December 31 2009 (3)
	Oil (Mbbls)	Gas (MMcf)	NGL (Mbbls)	Total (Mboe)	Total (Mboe)
Proved producing	49.4	626	23.5	177.2	11.6
Proved Non-Producing	-	203	7.6	41.4	-
Proved Undeveloped	99.0	1,821	68.3	470.9	-
Total Proved	148.4	2,650	99.4	689.5	11.6
Probable	63.7	1,137	42.6	295.6	3.1
Total Proved Plus Probable	212.1	3,787	142.0	985.1	14.7

Summary of Before Tax Net Present Values (Forecast Pricing) ($M) ⁽⁴⁾

		As at December 31, 2010 (2)		As at December 31,2009 (3)
	0%	5%	10%	10%
Proved producing	6,034	4,154	3,273	236
Proved Non-Producing	921	800	704	-
Proved Undeveloped	7,590	3,353	1,223	-
Total Proved	14,545	8,307	5,200	236
Probable	12,644	4,988	2,780	57
Total Proved Plus Probable	27,189	13,295	7,980	293

Notes:

⁽¹⁾ Gross company reserves are the company's total interest share before the deduction of any royalties and without including any royalty interest of the Company.
⁽²⁾ Based on Sproule's December 31, 2010 escalated price forecast.
⁽³⁾ Based on Sproule's. December 31, 2009 escalated price forecast.
⁽⁴⁾ The net present values of future net revenue do not represent fair market value.

OUTLOOK

In 2011 the company plans to participate in two additional Earning Wells under the South Pembina Joint Venture Drilling Program.  By paying 50% of the costs of each well, Base can earn a 30% working interest in 1,490 acres of Cardium rights.  It is expected that these two wells will be drilled in the third quarter of 2011.

Base Oil and Gas Ltd. is a Calgary based emerging oil and gas company, focused on the development of Cardium oil & gas reserves in the Western Canadian Sedimentary basin.

References herein to "boe" mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil.  BOE may be misleading, particularly if used in isolation.  A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements.  More particularly, this press release contains statements concerning the planned operational and exploration activities of the Company.  The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Base with respect to the Company's planned operational and exploration activities.  Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct.  Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties.  Actual results could differ materially from those currently anticipated due to a number of factors and risks.  These include, but are not limited to, the failure to obtain the necessary regulatory approvals and risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks, commodity price and exchange rate fluctuations). The forward-looking statements contained in this document are made as of the date hereof and the Company takes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. Additionally, Base undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed above.

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.