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Apr 06, 2010
Doxa Energy releases potential resource and cash flow estimates on its Peeler Ranch Eagle For Shale Prospect, South Texas
OUTLINES BUSINESS ACTIVITIES AND $5 MILLION FINANCING TERMS

VANCOUVER, BRITISH COLUMBIA - Doxa Energy Ltd. - TSX Venture Exchange DXA.P - ("Doxa" or the "Company"), today published prospective resource and associated discounted cash flow estimates on its proposed Qualifying Transaction, the Peeler Ranch Prospect ("Peeler" or "the Peeler Prospect"), which is located within the prolific Eagle Ford Shale trend of South Texas. Additionally the Company announced that it is currently evaluating some potential future commercial opportunities and acquisitions.

Upon closing of its Qualifying Transaction, the Company will own a 20% working interest, together with a 15% net revenue interest in the Peeler Prospect. Gross prospective resource recovery estimates for the Peeler Prospect, according to the "Graham Report" described below, are based on an anticipated 8 well development program and are as follows:

"Best" estimate ultimate recovery........... oil - 1,493 MBbls & gas - 14,782 MMscf

"Low" estimate ultimate recovery........... oil - 1,029 MBbls & gas - 10,143 MMscf

"High" estimate ultimate recovery........... oil - 1,986 MBbls  & gas - 20,649 MMscf

Cash flow for this prospective resource, net to the interest of the Company, based on a 5% discount basis, is estimated in the Graham Report for each case (Best, Low, High) at US $19, $10 and $29 million respectively. The Graham Report evaluation has been conducted in accordance with Canadian National Instrument (NI) 51-101, Sec 5.9, pertaining to prospective resources, utilizing forecast prices and costs.

Doxa Energy and Dynamic Production, Inc.

The Board of Directors of Doxa is comprised 50% by the senior management team of Dynamic Production, Inc. ("Dynamic") of Fort Worth , Texas . John D Harvison is President of both Dynamic and Doxa. Established in 1968, Dynamic is a successful privately held oil & gas exploration and production firm located in Fort Worth, Texas. Dynamic has drilled over 500 wells and is experienced in normal as well as over pressured vertical, deviated and horizontal

wells to 17,000 feet. Currently Dynamic is involved in hundreds of active wells, being a mix of operated and non-operated properties.

Arnold Armstrong, Chairman of Doxa, and senior managers from his group of companies make up the remaining 50% of Doxa's Board of Directors. Arnold Armstrong's group of private and public companies hold significant land, coal, copper, nickel and other business holdings internationally.

The Eagle Ford Shale

The Eagle Ford shale is a prolific new oil and gas play that is transforming a wide swath of South Texas into one of the most active resource plays in the US . Active participants in the Eagle Ford play include - Petrohawk Energy, Anadarko E & P, BP, Chesapeake Energy Corp., ConocoPhillips, EOG Resources, Newfield Exploration, XTO Energy and others. 

The shale immediately underlies the Austin Chalk formation, and has been considered by geologists to be the "source rock", or the original source of hydrocarbons found in the Austin Chalk above it. The Eagle Ford shale is a Cretaceous age, organically rich formation, found at depths ranging approximately from 6,000 feet to 14,000 feet. Thickness of the calcareous Eagle Ford shale ranges approximately from 50 feet to 300 feet. The Peeler Prospect is located within what is locally referred to as the updip oil window.

Doxa's Peeler Ranch Eagle Ford Shale Prospect

The Peeler Prospect is adjacent to an area under active development by EOG Resources within the Eagle Ford shale trend.  As its Qualifying Transaction, Doxa Energy plans to acquire, at cost, its interest in the Peeler Prospect from John D. Harvison, President and CEO and Arnold Armstrong, Chairman of Doxa Energy (See Doxa Energy news March 29, 2010).  The interest to be acquired consists of a twenty percent (20%) working interest and fifteen percent (15%) net revenue interest in the project, covering approximately 2,005.9 acres.  A pilot hole for the Peeler Prospect was spud on November 10, 2009 and evaluation of the Eagle Ford Shale formation, which was encountered below 9,500', is ongoing.

Immediate Opportunities

Doxa's management is currently considering various other commercial opportunities including additional prospects in the Eagle Ford Shale through Dynamic Production. Upon receiving the necessary approvals for its Qualifying Transaction, Doxa anticipates entering into additional joint ventures and/or acquisition opportunities.

Concurrent $5 Million Financing

Subject to completion of the Qualifying Transaction, Doxa will be raising up to $5,000,000 (the "Financing") by way of a concurrent private placement of Units at $0.50 per Unit, each unit comprising one common share and one half of one share purchase warrant (each a "Warrant"). Each whole Warrant shall entitle the holder to purchase a further common share at $0.75 for a period of two years from closing. Please refer to the Company's March 29, 2010 news release for additional financing and Qualifying Transaction details. 

The prospective resource data set forth in this news release based upon an independent  assessment and evaluation entitled Evaluation of Prospective Resources, Peeler Ranch Eagle Ford Shale Prospect, Atascosa County, Texas, prepared by Graham and Associates, Inc. of Austin, Texas,  with an effective date of February 1,  2010 (the "Graham Report"). The presentation summarizes the Company's crude oil, natural gas liquids and natural gas potential resource  reserve estimates and the associated net present values before income tax of future net revenue for the Company's interests  using forecast prices and costs based on the Graham Report. The Graham Report has been prepared in accordance with the standards contained in the COGE Handbook and the reserve definitions contained in National Instrument (NI) 51-101, Sec 5.9, pertaining to prospective resources, utilizing forecast prices and costs.

Prospective resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of further development projects.  Prospective resources have both an associated chance of discovery and a chance of development.  Prospective resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be sub classified based on project maturity.  There is no certainty that any portion o the resources will be discovered.  If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

All evaluations and reviews of future net cash flows are stated prior to any provisions for interest costs or general and administrative costs and after the deduction of estimated future capital expenditures for wells to which potential resources have been assigned. It should not be assumed that the estimates of future net revenues presented in the tables above represent the fair market value of the potential resources. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserve estimates of the Company's potential crude oil, natural gas liquids and natural gas resources provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crude oil, natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein.

The potential resource data provided in this release only represents a summary of the disclosure required under National Instrument 51-101 ("NI 51-101"). Additional disclosures have been provided in the Company's Information Circular available for viewing on www.sedar.com.

On behalf of the Board of Directors

John D. Harvison

President, Chief Executive Officer

For further information contact: Scott Parsons Director or Paul McKenzie Director 604.642.2625 or visit www.doxaenergy.com

Neither TSX Venture Exchange nor its Regulation Services providers (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 
 

You can view the Next News Releases item: Fri May 21, 2010, G. Arnold Armstrong Adds to Position in Doxa Energy Ltd. - Early Warning Report

You can view the Previous News Releases item: Mon Mar 29, 2010, Doxa provides update regarding qualifying Eagle Ford Shale Oil & Gas TRansaction, South Texas

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