OilVoice - Excelsior Announces Third Quarter 2008 Results

Excelsior Announces Third Quarter 2008 Results

29 November 2008

Excelsior Energy Limited reports results for the three and nine month periods ended September 30, 2008.

The Company continues to focus efforts on oil sands exploration and appraisal in the Hangingstone and West Surmont areas in the Athabasca oil sands region of Alberta. Excelsior plans to submit a 10,000 bbl/d SAGD demonstration project application at Hangingstone (“the Project Application”) in the summer of 2009.

“The Company continues to make good progress on its Project Application. We have high quality bitumen resource, in close proximity to infrastructure which will drive the project cycle-time and capital efficiency” said Dr. David Winter, Excelsior’s President and Chief Executive Officer.

“We look forward to a successful winter core and seismic program and we anticipate submitting our project application next summer. We will continue to be conservative and cautious in our capital deployment and we are fully funded through 2009 into 2010”.

Third Quarter Highlights
• As announced on July 29, 2008, an independent engineering report on the Hangingstone asset was completed by McDaniel and Associates in July 2008, (“the Report”). The Report assigned 119 mmbbls of Contingent Resources which were further sub-classified as economic. The Report also assigned 1.58 billion barrels of Discovered Resource (Petroleum initially in place) and a further 86 mmbbls of Prospective Resource. The Report indicates that the Contingent Resources support an economically feasible commercial project.
• In August 2008 the Company announced an equity financing to fund the 2008/2009 winter drilling program. The financing was completed on September 3, 2008 for gross proceeds of $11,286,848. The proceeds from this financing contributed to working capital of $14,454,765 at September 30, 2008. The Company is fully funded for the Hangingstone seismic, drilling and Project Application related work. As a result Excelsior does not anticipate a requirement for financing over the next 12 months. Management will continue to monitor financial markets during this period to evaluate access to capital
• Excelsior commenced its planning and engineering studies to support its application for a 10,000 bopd demonstration project. A qualified environmental and engineering company has been contracted to assist in regulatory application and environmental assessments for the Project Application. Field work commenced in August 2008.
• The Company completed a 28 km infill seismic program in October in the focus area in support of winter core drilling operations. The 2D program was interpreted and integrated into mapping in November and used to target winter drilling locations.

Fourth Quarter Outlook
• Excelsior continues to progress its program to submit a 10,000 bopd Project Application to the Alberta Government targeted for the end of Q2 2009. Planning and engineering studies for the Project Application have commenced.
• An Environmental Consultant and Submission Coordinator has been engaged to complete an environmental impact assessment at Hangingstone. The environmental work commenced in August and will continue through the winter and spring. Constraint mapping was completed in October for the proposed site of the SAGD central processing facility.
• A water source has been identified within the focus area and mapped using well and seismic data. Existing well data indicates that the water is saline and likely available for industrial use. The water source aquifer will be flow tested in December 2008 as part of the winter drilling program.
• A cap rock integrity evaluation has commenced with an evaluation of wellbore image logs across the seal formation. This work indicates that the cap rock shales are thick (50 – 70 meters) with very few natural fractures indicating cap rock integrity to be high. This will be confirmed by core tests which will be obtained in December as part of the drilling program.
• Excelsior has engaged an engineering company with extensive oil sands and SAGD experience to prepare the front end engineering and design for the development project application. This contractor expects to finalize the Project Application in Q2 2009 when the results of the 2008/2009 drilling program have been evaluated.
• Active consultation with all stakeholders has begun. Excelsior will continue to fulfill its obligations regarding stakeholders consultation as operations progress.
• Alberta Energy Resources Conservation Board has approved the Company’s Exploration Activities Permit and Excelsior has commenced operations for the 2008/2009 winter drilling program to delineate the focus area identified for the Project Application in the south eastern portion of the Hangingstone asset.

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