Orleans Energy Announces Year-End Reserves & Operational Statistics

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CALGARY, ALBERTA--(CCNMatthews - March 8, 2006) - Orleans Energy Ltd. (TSX VENTURE:OEX) ("Orleans" or the "Company") is pleased to provide its year-end December 31, 2005 summarized reserves information and unaudited operational statistics. Highlights of Orleans' accomplishments include the following:

- Significant Reserves Expansion.

Proved plus probable oil and gas reserves at December 31, 2005 total 3.77 million barrels of oil equivalent ("boe"). Orleans' reserves base results in a proved plus probable reserve life index of 7.5 years (based on annualized calendar fourth quarter 2005 production).

- Capital Spending Efficiency.

Calendar 2005 finding, development and acquisitions cost of $9.71 per proved plus probable boe (adjusted for future capital requirements), resulting in a projected corporate recycle ratio of approximately 3.8 times and a production replacement ratio of 9.2 times.

- Net Asset Value Increase.

At year-end 2005, the Company's net asset value was $5.88 per share (fully-diluted and discounted at 8% pre-tax).

- Drill Bit Success.

A total of 18 gross (16.5 net) wells drilled in calendar 2005 with a 100 percent success rate (cased).

- Solid Production Growth.

Average daily production for calendar 2005 was 995 boe/day. Fourth quarter production averaged 1,378 boe/day, a 190 percent increase since acquiring the Halkirk property in December 2004.

Oil and Gas Reserves

The following tables provide information on Orleans' crude oil and natural gas reserves. The Company's reserves were evaluated by the independent reserve engineering firm, Sproule Associates Limited ("Sproule"). The December 31, 2005 reserve report was prepared pursuant to National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities and was reviewed and approved by Orleans' Board of Directors. The Company's production profile is supported by a balanced reserves base, weighted 53 percent crude oil and natural gas liquids and 47 percent natural gas, and a reserve life index of 7.5 years (proved plus probable).



------------------------------------------------------------------------
December 31, 2005 Reserves Summary (Company interest before royalties)
------------------------------------------------------------------------
(per Sproule's December
31, 2005 escalated Natural Gas Crude Oil & Ngls Oil Equivalent
price forecast) (MMcf) (Mbbls) (Mboe) (6:1)
------------------------------------------------------------------------
Proved developed
producing 4,387 780.6 1,511.8
------------------------------------------------------------------------
Proved developed
non-producing 509 21.7 106.6
------------------------------------------------------------------------
Proved undeveloped 1,081 131.0 311.1
------------------------------------------------------------------------
Total Proved ("1P") 5,977 933.3 1,929.5
------------------------------------------------------------------------
Probable 4,593 1,077.6 1,843.1
------------------------------------------------------------------------
Total Proved plus
Probable ("2P") 10,570 2,010.9 3,772.6
------------------------------------------------------------------------
------------------------------------------------------------------------


------------------------------------------------------------------------
December 31, 2005 Net Present Values Summary (Company interest before
royalties)
------------------------------------------------------------------------
(per Sproule's December
31, 2005 escalated
price forecast) Present value of cash flows before-tax ($000s)
------------------------------------------------------------------------
0% 8% 10% 15%
------------------------------------------------------------------------
Proved developed
producing $ 57,400 $ 47,826 $ 46,042 $ 42,273
------------------------------------------------------------------------
Proved developed
non-producing 3,948 2,874 2,687 2,311
------------------------------------------------------------------------
Proved undeveloped 8,038 6,511 6,190 5,472
------------------------------------------------------------------------
Total Proved ("1P") 69,386 57,211 54,919 50,056
------------------------------------------------------------------------
Probable 65,770 38,894 35,212 28,320
------------------------------------------------------------------------
Total Proved plus
Probable ("2P") $ 135,156 $ 96,105 $ 90,131 $ 78,376
------------------------------------------------------------------------
------------------------------------------------------------------------

 


Capital Efficiency

The following tables highlight the efficiency of Orleans' capital expenditures during the nine-month fiscal reporting year and twelve-month calendar year ended December 31, 2005, respectively.



------------------------------------------------------------------------
Finding, Development & Acquisitions Costs ("FD&A")
------------------------------------------------------------------------
Nine Months Ended Twelve Months Ended
(amounts in $000s except Dec. 31, 2005 Dec. 31, 2005
reserve units and Fiscal Year (1) Calendar Year
unit costs) 1P 2P 1P 2P
------------------------------------------------------------------------
Capital expenditures (2,3) $ 19,782 $ 19,782 $ 24,622 $ 24,622
------------------------------------------------------------------------
Future capital -
December 31, 2005 (4) 5,014 8,184 5,014 8,184
------------------------------------------------------------------------
Future capital -
Opening period (4,5) (955) (1,490) (23) (180)
------------------------------------------------------------------------
All-in total, including
future capital $ 23,841 $ 26,476 $ 29,613 $ 32,626
------------------------------------------------------------------------
Total reserve additions
(mboe) 1,316.4 2,367.9 1,909.8 3,359.8
------------------------------------------------------------------------
FD&A Cost ($/boe) $ 18.11 $ 11.18 $ 15.51 $ 9.71
------------------------------------------------------------------------
------------------------------------------------------------------------

Notes:
(1) On April 11, 2005, the Company filed notice under National
Instrument 51-102 stating its intention to change the date of its
fiscal year-end to December 31 from March 31, with the next year-end
occurring December 31, 2005. This change was effected in order to
have a year-end consistent with that of other public companies in
the oil and gas industry.
(2) "Fiscal Year" capital expenditures are based on capital costs
recognized in the period between April 1, 2005 and December 31,
2005 (unaudited).
(3) "Calendar Year" capital expenditures are based on capital costs
recognized in the period between January 1, 2005 and December 31,
2005 (unaudited).
(4) Future capital expenditures required to convert proved non-producing
and probable reserves to proved producing.
(5) "Opening period" future capital for "Fiscal Year" is referenced
from the Company's March 31, 2005 reserves information previously
disclosed. " Opening period" future capital for "Calendar Year"
referenced from the October 31, 2004 reserves report prepared by
Sproule pursuant to the acquisition of the Halkirk assets and as
reported in the Information Circular and Proxy Statement with
respect to the Plan of Arrangement involving Orleans Resources
Inc. and Orleans Energy Ltd. as filed on SEDAR on December 29, 2004.


------------------------------------------------------------------------
Production Replacement Nine Months Twelve Months
Ended Dec. 31, 2005 Ended Dec. 31, 2005
Fiscal Year Calendar Year
------------------------------------------------------------------------
Total reserve additions
(proved plus probable) (mboe) 2,367.9 3,359.8
------------------------------------------------------------------------
Total production (mboe) 312.9 363.2
------------------------------------------------------------------------
Production Replacement (%) 757% 925%
------------------------------------------------------------------------
------------------------------------------------------------------------

 


Net Asset Value

The uplift in Orleans' net asset value at December 31, 2005 was achieved through successful development drilling, re-completions and focused acquisitions, combined with strong commodity prices.



------------------------------------------------------------------------
December 31, 2005
(per share
figures based
on fully-diluted NPV 8% Pre-Tax NPV 10% Pre-Tax NPV 15% Pre-Tax
shares) ($000s) $/share ($000s) $/share ($000s) $/share
------------------------------------------------------------------------
Proved
plus probable
(2P) reserves
(1,2) $ 96,105 $ 5.79 $ 90,131 $ 5.43 $ 78,376 $ 4.72
------------------------------------------------------------------------
Undeveloped
acreage (3) 2,201 0.13 2,201 0.13 2,201 0.13
------------------------------------------------------------------------
Net debt (4) (4,362) (0.26) (4,362) (0.26) (4,362) (0.26)
------------------------------------------------------------------------
Seismic (5) 978 0.06 978 0.06 978 0.06
------------------------------------------------------------------------
Proceeds from
stock
options 2,673 0.16 2,673 0.16 2,673 0.16
------------------------------------------------------------------------
Net Asset
Value $ 97,595 $ 5.88 $ 91,621 $ 5.52 $ 79,866 $ 4.81
------------------------------------------------------------------------
------------------------------------------------------------------------

Notes:
(1) Reserves independently evaluated by Sproule Associated Limited
("Sproule") as at December 31, 2005.
(2) Net present values ("NPV") based on Sproule's December 31, 2005
escalated price forecast.
(3) Seaton Jordan December 1, 2005 evaluation, supplemented by Orleans'
Crown land sale purchase of 4.25 sections on December 14, 2005.
(4) Net debt as at December 31, 2005, including working capital deficit
(estimated and unaudited).
(5) Internally estimated market value of proprietary seismic.
(6) The Company's fully-diluted shares at December 31, 2005 total
16,608,952, which includes 15,099,047 common shares and 1,509,905
stock options.

 


Drilling Activity

The following table summarizes Orleans' calendar 2005 drilling results. Of the 18 wells drilled in calendar 2005, 89 percent were operated and managed by the Company's technical personnel.



------------------------------------------------------------------------
Twelve Months Ended December 31, 2005 Gross Net
------------------------------------------------------------------------
Crude oil 9 9.0
------------------------------------------------------------------------
Natural gas 9 7.5
------------------------------------------------------------------------
Dry & abandoned - -
------------------------------------------------------------------------
Total 18 16.5
------------------------------------------------------------------------
------------------------------------------------------------------------

 


Production

Orleans' production is generated from two core areas within central Alberta: Halkirk in east-central Alberta and Pine Creek in west-central Alberta. The Company operates approximately 81 percent of its total oil and gas production and holds a corporate average working interest of approximately 71 percent. Orleans' sales production is currently on-track to meet the Company's previously announced 2006 average daily production guidance range of 1,600 to 1,700 boe/day.



------------------------------------------------------------------------
Quarterly Comparison - Three Months Ended Calendar
Mar. 31, June 30, Sep. 30, Dec. 31, Year
------------------------------------------------------------------------
Average daily
production: 2005 2005 2005 2005 2005
------------------------------------------------------------------------
Natural gas
(mcf/day) 1,404 2,385 3,231 4,160 2,804
------------------------------------------------------------------------
Liquids
(Crude oil &
Ngls) (bbls/day) 325 435 662 685 528
------------------------------------------------------------------------
Oil equivalent
(boe/day) 559 832 1,200 1,378 995
------------------------------------------------------------------------
% Liquids
(Crude oil
& Ngls) 58% 52% 55% 50% 53%
------------------------------------------------------------------------
------------------------------------------------------------------------

 


First Quarter 2006 Update

Thus far in 2006, Orleans has drilled or participated in the drilling of 8 (4.0 net) wells, resulting in 7 (3.0 net) natural gas wells and 1 (1.0 net) abandoned well bore, all located in the Company's Halkirk core area. At Pine Creek, in the Edson area of west-central Alberta, the Company has commenced the well licensing process in anticipation of spudding its first well of a multi-well program in June 2006, subsequent to spring break-up.

Orleans' anticipates releasing its audited financial results for the nine-month fiscal year ended December 31, 2005 during the week of March 27, 2006.

Orleans Energy Ltd. is a Calgary, Alberta-based emerging crude oil and natural gas company, with common shares trading on the TSX Venture Exchange under the symbol "OEX". Orleans is a team of dedicated, experienced professionals focused on the creation of shareholder value via acquisition and development of crude oil and natural gas assets in Alberta.

Certain information regarding the Company contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other similar statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks and uncertainties and may be based on assumptions that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement.

In this news release, reserves and production data are commonly stated in barrels of oil equivalent ("boe") using a six to one conversion ratio when converting thousands of cubic feet of natural gas ("mcf") to barrels of oil ("bbl") and a one to one conversion ratio for natural gas liquids ("NGLs" or "Ngls"). Such conversion may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf: 1 bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

The net present value of future net revenue or cash flows attributable to the Company's reserves is stated without provision for interest costs and general and administrative costs, but after providing for estimated royalties, production/operating costs, future development costs, other income, and well abandonment costs for only those wells assigned reserves by Sproule. It should not be assumed that the undiscounted or discounted net present value of future net revenue or cash flows attributable to the Company's reserves evaluated by Sproule represent the fair market value of those reserves. Actual reserves may be greater than or less than the estimates provided herein.


The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release. Orleans Energy Ltd.
Barry Olson
President & CEO
(403) 215-2941
Email: bolson@orleansenergy.com

or

Orleans Energy Ltd.
Dean Bernhard
Vice President, Finance & CFO
(403) 215-2945
Email: dbernhard@orleansenergy.com

or

Orleans Energy Ltd.
Head office
Suite 1250, 521-3rd Avenue S.W.
Calgary, Alberta, T2P 3T3
(403) 261-8850 (FAX)
Website: www.orleansenergy.com