Covenant sets 2010-2011 exploration budget at $3-million

Covenant sets 2010-2011 exploration budget at $3-million

2010-10-26 13:53 ET - News Release


Mr. Frank Port reports

NI 51-101 TECHNICAL REVIEW OF OIL AND GAS LEASES IN MONTANA

Covenant Resources Ltd. has publicly released a technical review for its recently acquired oil and gas leases in the Sweetgrass Arch area of Montana, consisting of 41,500 net acres in Toole and Pondera counties.

The report, prepared by MHA Petroleum Consultants LLC, an independent qualified reserves evaluator, meets National Instrument 51-101 disclosure standards and is available on SEDAR.

The Sweetgrass Arch of northwest Montana is part of an active oil and gas district (Alberta basin). The area surrounding the company's leases has produced economic oil and gas pools, as well as a series of new discoveries, and is presently being actively explored by Texas-based Quicksilver Resources, Newfield Exploration Co. and Rosetta Resources, among others. Recent activity in the region reflects continued strong interest in those parts of Montana, North Dakota and Saskatchewan that cover the Bakken shale oil field. The Bakken formation hosts one of the largest contiguous deposits of oil and natural gas in the United States, according to the U.S. Geological Survey.

The company anticipates a 2010-2011 work program with an estimated budget of $2.5-million to $3-million to explore its leases. The proposed program would include a minimum eight-well drill program, to be based on newly acquired seismic data and directed at depths considered mostly favourable to host oil resources. The company will continue to seek and evaluate additional North American oil and gas properties with production potential in order to achieve its goal of becoming a mid-tier oil and gas company.

We seek Safe Harbor.