PRD Energy Inc PREGF

PRD Energy Awarded Petroleum Exploration and Produ

[not_broke_yet]

CALGARY, ALBERTA--(Marketwire - Nov. 1,2011) - PRD Energy Inc. ("PRD" or the"Company") (TSX VENTURE:PRD) is pleased to announce that it hasbeen awarded the Volkensen Production License and the Steinhorst ExplorationLicense covering approximately 240,000 acres in Germany. Both licenses arelocated onshore in the state of Lower Saxony, Germany and have been awarded toPRD Energy GmbH, a wholly-owned subsidiary of the Company. PRD expects tocommence operations on both licenses in early 2012.
The Volkensen Production License covers more than2,800 acres and includes a previously producing field which was abandoned in1993 during a low oil price environment and prior to the advent of moderndrilling and completion technology. The license was awarded for an initialperiod of three years and includes all rights surface to basement. It providesPRD with the opportunity to redevelop and bring this oil pool back ontoproduction. Pursuant to the terms of the license, PRD is committed to bringingat least one well onto production within the initial three year term.
The Steinhorst Exploration License covers more than238,000 acres and includes rights to explore several abandoned oil fields.Several producing fields are located in the license area for which PRD does nothave the right to explore. The license was awarded for an initial period of fiveyears and includes all rights surface to basement. Pursuant to the terms of thelicense, PRD is committed to the acquisition and processing of seismic data andto drilling two wells within the initial five year term.
PRD Energy has also applied for several otherexploration and production licenses in Germany. The award of these licenses issubject to the review and approval by various municipal and state governmentauthorities. In addition, PRD Energy continues to negotiate with the majoroperators in the area to pursue farm-in and acquisition opportunities.
Given the cost challenges associated with drillingactivities in Europe, PRD Energy believes it has developed a strategy thatmaterially mitigates these costs. Part of this strategy is to have asufficiently large pool of prospects, such as abandoned oil and gas fields, inorder to achieve efficiency gains through continuous operations pertaining tothe redevelopment of these prospects. PRD Energy anticipates these prospectswill also materially shorten the timeframe to achieve profitable production.Further, PRD Energy intends to utilize new drilling and stimulation techniquesto optimize flow rates and reserves recovery, reduce costs, and reduce theenvironmental footprint associated with our activities. It is critical to oursuccess to effect any operations in an environmentally sensitive and transparentmanner for the benefit of all stakeholders.
PRD Energy continues to evaluate projects based on aconservative risk profile, choosing projects which allow the application of ouroptimization and development skills. We continue to evaluate other onshoreprospects in Europe, in politically stable countries having beneficial tax androyalty structures, with low geological risk and repeatable development drillingopportunities.
PRD Energy is well capitalized with a strong cashposition, which allows us to commence developing opportunities that meet ourevaluation metrics.