CALGARY, ALBERTA--(Marketwire - Jan. 15, 2009) - Canoro Resources Ltd. ("Canoro" or the "Company") (TSX VENTURE:CNS) is updating the drilling and status on the AA-ON/7 exploration block in northeast India. Canoro has completed its appraisal drilling operations at Dergaon #2. The targeted zone was of equivalent structural height to Dergaon # 1, but appeared non-hydrocarbon bearing on well-log data. Consequently, the Dergaon #2 appraisal well has been plugged and abandoned.
The Company is currently evaluating the status of the AA-ON/7 block which comprises 473 km2 in the State of Assam and 319 km2 in the State of Nagaland. Given the results of Dergaon #2 and given that the Company has no further drilling operations contemplated on the Assam side of the Block, the Company plans to relinquish, subject to Government of India and partner approvals, this acreage back to the Government of India. As a result of the planned relinquishment, probable reserves of 21.2 BCF (3.5 MMBOE) net to Canoro's 65% working interest and possible reserves of 15.8 BCF (2.6 MMBOE) net will be written down by the Company, also subject to Government of India approval. Any relinquishment of AA-ON/7 will not affect any proven reserves of the Company previously reported.
The Nagaland portion of the Block is under consideration by the Government of India to be included in a new Production Sharing Contract which if approved, is expected to be awarded to the Company in 2009.
Common shares of Canoro trade on the TSX Venture Exchange under the symbol 'CNS'.
This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks and uncertainties, certain of which are beyond Canoro's control. Such risks and uncertainties include, 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, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada, the United States and overseas, 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, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Canoro's actual results, performance or achievements could differ materially from those expressed in, or implied by, these 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 so, what benefits, including the amount of proceeds, that Canoro will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Canoro or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Canoro 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 Press Release contains the terms "funds from operations", and "netbacks" which are not recognized measures under Canadian generally accepted accounting principles. The Company uses these measures to help evaluate its performance. Management considers netbacks an important measure as it demonstrates its profitability relative to current commodity prices. Management uses funds from operations to analyze performance and considers it a key measure as it demonstrates the Company's ability to generate the cash necessary to fund future capital investments and to repay debt. Funds from operations has been defined by the Company as net earnings adjusted for non-cash items (depletion, depreciation and accretion, stock-based compensation, unrealized (gain)/loss on foreign exchange, and unrealized investment (gain)/loss) and excludes the change in non-cash working capital related to operating activities and expenditures on asset retirement obligations and reclamation. Canoro's determination of funds from operations may not be comparable to that reported by other companies nor should it be viewed as an alternative to cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with Canadian GAAP.
Barrel of oil equivalent
Where amounts are expressed on a barrel of oil equivalent (boe) basis, natural gas volumes have been converted to barrels of oil equivalent at six thousand cubic feet to one barrel of oil equivalent (6 mcf equals 1 boe). This conversion ratio is the convention used in the oil and natural gas industry and is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalent at the wellhead. The use of boe's may be misleading, particularly if used in isolation.The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this News Release.
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