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BELIZE-GOVERNMENT PRESS RELEASES
06-03-05
Press Office Belize Natural Energy Limited set to drill for Oil and Gas 03 June, 2005 - Belmopan Today in Belmopan, Belize local exploration Company Belize Natural Energy Limited formally announced its commencement of drilling operations to explore for Oil and Natural Gas. The exciting news is the culmination of three years work in Belize where the Company has spent much time and money developing drilling prospects. Company President Ms. Susan Morrice spoke today of her absolute joy and the anticipation of the project for the Company and for the People of Belize. Ms Morrice stated “Almost 20 years ago I came to Belize first to explore the potential for Natural Resources. The 20 years has taught me much about the great geological intricacy of the Country and I am eagerly looking forward to the potential of a drilling program.” She said while it is a time of great joy it was also a time for a moment of reflection as almost a year ago her working partner in exploration in Belize the late Michael Usher died. She stated “Mike really loved this Country; he wanted so much to have the Natural Resources of the Country developed like a great beacon for the Country to enjoy. Having worked most of his life outside Belize in the oil and gas industry he had a great sense that there were great possibilities in this Country. In fact he convinced all of us to keep looking, so therefore it is completely appropriate that this first well to be drilled will be named the Mike Usher #1 Well.” Leading Geologist and Company Director Mr Jean Cornec stated “I have had a life long interest in finding potential natural resources in Belize. It is with great joy today that we can formally announce a major step towards the finding of these much needed resources for the Country.” He went on to explain that the work program over the last two years has been busy. A total of 134 kilometers of 2D seismic lines were acquired in the first half of 2004. The data has now been processed and interpreted. There was significant improvement in data quality from the old Chevron data and we now have mapped the geology with greater confidence and outline prospective drill sites. A potential 3,000-acre structural closure has been discovered and mapped in the Yalbac and Hill Bank formations in the area of Spanish Lookout. Such structure could conservatively yield over 25-50 million barrels of recoverable oil. This figure does not include closures at shallow depths that add to more than 1,000 acres with additional potential reserves of 12 - 25 million barrels of recoverable oil. It is hoped that the drill site can test both closures. The further seismic program over 60 kilometers was completed in the last quarter of 2004 and early 2005. During November and December 2004 approx 30 Kilometer of this data was collected and initial analysis shows the better definition of the original 3,000 acre structure with other prospects emerging. Final collection of data in other locations is ongoing through the second quarter 2005 and should be completed and analyzed by end June 2005 to coincide with the results of the drilling program in Spanish Lookout. Mr Paul Marriott, International Drilling contractor and Director in Belize Natural Energy Limited is heading up the drilling operations on the ground in Belize. He commented “ Since our first visit to Belize some three years ago we have been looking forward to this time. We have selected the best prospects from the geological information together and brought forward a well developed and highly skilled program to ensure that we can have the best opportunity to get production in Belize. Operationally and logistically this has been difficult but I have to state that the levels of co-operation and goodwill that we have encountered have been outstanding and it has been a pleasure to prepare to work I this great part of the world. He went on to state “Although there has been much disappointment over drilling operations in the past in Belize, like all technology much has moved on and new techniques are available to assist us. Additionally, the information from previous drilling operations is never wasted and we know that this information has helped to shape and define our work program.” Sheila McCaffrey, Director of Belize Natural Energy Limited stated that “A budget estimate of the costs involved is $6.00 million from outside investors and working interest partners for the purposes of drilling and completing the test areas identified in the seismic. Exploration success would require an estimated additional $10-15 million in development expenditures to support an initial production rate of 3000-5000 barrels of oil per day. This in turn would generate $1-2 million per month in cash flow that would then be adequate to support a drilling program that could grow through internal cash flow, we obviously have much to do to create this potential but this work is a start in the right direction.” She went on to state “Since we commenced operations in Belize over three years ago we have been made to feel extremely welcome, we have taken time to understand the economic and geological needs of the area, we are very excited about the possibilities for the people of the Country and we hope and pray over the next weeks and months we will have further updates for everyone.” Sheila summarized the potential for the project as follows: Identification of ready-to-drill prospect in Spanish Lookout area, Belmopan, with oil bearing reservoirs at shallow depths that have not been stimulated with modern techniques. It includes one well, Eagle#1, drilled in 1994 that presently flows gassy oil when surface valve is opened. Potential for light/high grade 40º API gravity oil in the project areas. Potential natural gas. Ready market for both crude oil and natural gas. Belize Natural Energy Ltd originally acquired a 463,000 acre exploration license onshore Belize, this acreage has been added to and a total of 478,000 acres is now available for exploration under a Production Sharing Agreement (PSA) with the Government of Belize signed in Jan 2002. In July 2004 an additional acreage from Block 5A (adjoining to original) was granted bringing the acreage to 595,000 acres. Working partnership with CHx Capital LLC, Denver, Colorado CHx Capital and its affiliate Aspect Energy LLC agreed a strategic partnership with Belize Natural Energy Ltd. CHx is an investment Company directed by Mr Alex Cranberg who founded and owns 70% of Aspect Energy LLC. Alex's experience with Aspect LLC is very pertinent to the significance of his investment in the Belize project. Aspect Energy LLC is a substantial, privately owned exploration and production company operating primarily in the Texas and Louisiana Gulf Coast area. The Company is focused on exploratory drilling backed by extensive analysis of 3-D seismic data.