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Message: NR approvals of farm-in
LION ENERGY RECEIVES FINAL APPROVALS FOR FARM-IN WITH AFRICA OIL CORP.
& ANNOUNCES INDEPENDENT RESOURCE ESTIMATE
March 15, 2010, Vancouver, BC
– Lion Energy Corp. (the “Company” or “Lion Energy
”) (TSX.V –
LEO)
is pleased to announce that the TSX Venture Exchange has granted its final approval for the Farm-
In agreement between the Company and Africa Oil Corp., which grants Lion Energy the right to earn an
interest in five petroleum blocks located in the Republic of Kenya and in Puntland, Somalia. See also the
Company's news release dated May 28, 2009.
An independent assessment of the Company's contingent and prospective resources has been completed
by Gaffney, Cline & Associates. The independent assessment was completed January 21, 2010 and was
carried out in accordance with the standards established by the Canadian Securities Administrators in
National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities.
Lion Energy has the right to earn an interest from Africa Oil Corp. in five petroleum blocks located in the
Republic of Kenya and in Puntland, Somalia. These blocks contain under-explored plays in basins that
have proven and productive analogues, or where the petroleum system is calibrated by existing well and
seismic data. Please see attached tables with numbers taken from the report of the in-place, contingent and
prospective oil resources as summarized by Lion Energy.
Country Blocks
Lion's Working
Interest (%)
Gross Acerage
(km²)
Net Acerage
(km²)
Block 09 10 27,778 2,777.80
Block10A 25 14,747 3,686.80
Block 10BB 20 12,491 2,498.20
Nogal 15 49,436 7,415.40
Dharoor 15 28,376 4,256.40
Kenya
Puntland
KENYA: CONTINGENT RESOURCES
KENYA BLOCK 10BB SUMMARY OF GROSS IN-PLACE ESTIMATE
Low Best High
Block 10BB Loperot
‐
1 7 15 63
Gross In
‐Place Estimate (MMBbl)
Licence Discovery
KENYA BLOCK 10BB SUMMARY OF GROSS CONTINGENT RESOURCES
AS AT 1
ST DECEMBER, 2009
1C 2C 3C
Block 10BB Loperot
‐
1 2 5 25
Licence Discovery
Gross Contingent Resource (MMBbl)
KENYA BLOCK 10BB SUMMARY OF NET CONTINGENT RESOURCES
AS AT 1
ST DECEMBER, 2009
1C 2C 3C
Block 10BB Loperot
‐
1 0.4 1 5
Licence Discovery
Net Contingent Resource (MMBbl)
Loperot-1 Discovery and Contingent Resources
The Loperot-1 well was drilled in 1992 to test a fault closed structural trap. The discovery has Gross and
Contingent Resources reported in the above tables. The Loperot-1 discovery is classified as Contingent
Resources since oil has been proven to exist in the structure from the results of the well, which recovered
oil on drill stem test. Re-classification of these contingent resources to reserves will require additional
activity to identify the presence of a potentially economic volume of oil at the Loperot-1 discovery. This
activity could comprise the acquisition of additional seismic data to confirm the area of closure and the
drilling of a well or wells to appraise the extent of the discovery, demonstrate hydrocarbon quality and
reservoir productivity. The minimum commercial field size will need to take into account the local
economic, environmental, political and regulatory issues including the current lack an infrastructure in the
area. These issues will need to be addressed in the field development plan for the discovery, which when
sanctioned would allow the volumes to be classified as reserves.
Contingent Resources
are those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations using established technology or technology under development,
but which are not currently considered to be commercially recoverable due to one or more contingencies.
Contingencies may include factors such as economic, legal, environmental, political, and regulatory
matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated
discovered recoverable quantities associated with a project in the early evaluation stage. Contingent
Resources are further classified in accordance with the level of certainty associated with the estimates and
may be subclassified based on project maturity and/or characterized by their economic status.
Low Estimate:
This is considered to be a conservative estimate of the quantity that will actually
be recovered. It is likely that the actual remaining quantities recovered will exceed the low
estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90)
that the quantities actually recovered will equal or exceed the low estimate.
Best Estimate:
This is considered to be the best estimate of the quantity that will actually be
recovered. It is equally likely that the actual remaining quantities recovered will be greater or less
than the best estimate. If probabilistic methods are used, there should be at least a 50 percent
probability (P50) that the quantities actually recovered will equal or exceed the best estimate.
High Estimate:
This is considered to be an optimistic estimate of the quantity that will actually
be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high
estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10)
that the quantities actually recovered will equal or exceed the high estimate.
There are several contingencies that prevent the classification of the contingent resources as reserves.
Lion
Energy
has no definitive plans to develop the oil resources in Block 10BB at this time and accordingly
these are considered contingent resources. An evaluation has yet to be conducted in order to determine the
economic viability of these contingent resources.
KENYA BLOCKS 9, 10A AND 10BB SUMMARY OF (UNDISCOVERED) OIL PROSPECTIVE
RESOURCES AS AT 1
ST DECEMBER, 2009
Licence Prospect / Lead P/L
Gross Best
Estimate of
Oil In Place
(MMBbl)
Gross Best
Estimate
(MMBbl)
LEO Working
Interest (%)
Net Best
Estimate
(MMBbl)
GCoS
Block 9 Bogal (Deep) P 1,334 206 10% 20.6 0.18
Block9 Bogal
‐
2 Shallow P 378 95 10% 9.5 0.16
Block 9 Ndovu W
‐
1 L 257 64 10% 6.4 0.1
Block 9 Ndovu W
‐
2 L 191 48 10% 4.8 0.12
Block 9 Ndovu W
‐
3 L 106 27 10% 2.7 0.11
Block 9 Duma East L 215 54 10% 5.4 0.125
Block 9 Duma N
‐
1 L 533 133 10% 13.3 0.11
Block 9 Duma N
‐
2 L 604 151 10% 15.1 0.12
Block 9 Duma N
‐
3 L 191 48 10% 4.8 0.11
Block 9 Duma S
‐
1 L 278 70 10% 7 0.12
Block 9 Duma S
‐
2 L 106 26 10% 2.6 0.11
Block 9 Kaisut L 423 106 10% 10.6 0.1
Block 10A Lead A L 442 103 25% 25.75 0.08
Block 10A Lead B L 335 82 25% 20.5 0.09
Block 10A Lead C L 48 12 25% 3 0.1
Block 10A Lead D L 217 53 25% 13.25 0.08
Block 10BB Kamba P 276 83 20% 16.6 0.14
Block 10BB Kapunga P 248 74 20% 14.8 0.14
Block 10BB Kamutai P 199 60 20% 12 0.14
Block 10BB Kegilai P 54 16 20% 3.2 0.09
Block 10BB Kalabata P 13 4 20% 0.8 0.14
Block 10BB Ngiri L 974 292 20% 58.4 0.06
Block 10BB Paa L 58 17 20% 3.4 0.04
Block 10BB Pofu L 107 32 20% 6.4 0.05
Block 10BB Mamba L 1056 317 20% 63.4 0.06
Block 10BB Nyati L 111 33 20% 6.6 0.05
Block 10BB Tumbili L 218 55 20% 11 0.04
Block 10BB Kiboko L 50 15 20% 3 0.06
Block 10BB Kuru L 186 56 20% 11.2 0.07
Block 10BB Duma L 198 59 20% 11.8 0.05
Block 10BB Heroe L 266 80 20% 16 0.06
Block 10BB Fisi L 134 40 20% 8 0.06
Block 10BB Twiga L 186 56 20% 11.2 0.05
Block 10BB Chorea L 366 110 20% 22 0.07
Block 10BB Tai L 273 82 20% 16.4 0.05
Block 10BB Chura L 481 144 20% 28.8 0.04
Block 10BB Chui L 271 81 20% 16.2 0.05
Block 10BB Popo L 102 31 20% 6.2 0.04
Notes:
1. Net Prospective Resources are stated herein in terms of LEO's net Working Interest (WI) in the properties and, due to the very
immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the relevant PSC. In this
regard these volumes stated herein will exceed the volumes which would arise to LEO under the terms of that PSC should a discovery
of the size indicated be made and subsequently developed.
2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best
Estimate'.
3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this
prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource, although the
volume of resource so categorized would reflect the results of the discovery well and may be significantly different (higher ir lower)
from those reported here. These GCoS percentage values have not been arithmetically applied within this assessment.
4. P/L = Prospect or Lead. A Lead is a geological feature that is currently poorly defined and requires more data acquisition and/or
evaluation in order to be classified as a prospect for drilling.
5. This table of information is a summary compiled by Lion Energy Corp. based on information provided in the report.
(1) Bogal (Deep) is currently being tested by the Bogal-1 well that spudded on 28
th
October 2009. This well has a pTD of 5,500 m and is expected
to take up to 6 months to complete.
PUNTLAND SUMMARY OF UNDISCOVERED OIL PROSPECTIVE RESOURCES
AS AT 1
ST DECEMBER, 2009
Licence Lead Reservoir
Gross Best
Estimate of
Oil In Place
(MMBbl)
Gross Best
Estimate
(MMBbl)
LEO Working
Interest (%)
Net Best
Estimate
(MMBbl)
GCoS
Jesomma 1,830 457 15% 68.55 0.11
Gumbero 681 171 15% 25.65 0.09
Gabredarre 1,663 416 15% 62.4 0.13
Jesomma 207 52 15% 7.8 0.08
Gumbero 114 28 15% 4.2 0.07
Gabredarre 278 70 15% 10.5 0.09
Jesomma 1,079 268 15% 40.2 0.11
Gumbero 611 154 15% 23.1 0.09
Gabredarre 1,457 364 15% 54.6 0.13
Jesomma 330 83 15% 12.45 0.1
Gumbero 184 46 15% 6.9 0.08
Gabredarre 453 113 15% 16.95 0.12
Jesomma 319 80 15% 12 0.1
Gumbero 176 44 15% 6.6 0.08
Gabredarre 421 105 15% 15.75 0.12
Jesomma 378 95 15% 14.25 0.11
Gumbero 210 53 15% 7.95 0.09
Gabredarre 507 126 15% 18.9 0.13
Jesomma 227 57 15% 8.55 0.11
Gumbero 126 32 15% 4.8 0.09
Gabredarre 308 77 15% 11.55 0.13
Jesomma 293 73 15% 10.95 0.12
Gumbero 162 40 15% 6 0.1
Gabredarre 391 98 15% 14.7 0.14
Jesomma 1,196 299 15% 44.85 0.08
Gumbero 664 166 15% 24.9 0.06
Gabredarre 1,760 440 15% 66 0.09
Jesomma 360 90 15% 13.5 0.06
Gumbero 200 50 15% 7.5 0.05
Gabredarre 520 130 15% 19.5 0.07
Jesomma 220 55 15% 8.25 0.06
Gumbero 120 30 15% 4.5 0.05
Gabredarre 320 80 15% 12 0.07
Jesomma 144 36 15% 5.4 0.06
Gumbero 80 20 15% 3 0.05
Gabredarre 220 55 15% 8.25 0.07
Darin Block Dharoor
Lead 1
Lead 2
Lead 3
Nogal Block Kalis East
Kalis South
Kalis SE
Kalis SW
Kalis West
Nogal SE
‐
A
Nogal SE
‐
B
Nogal South
Notes:
1. Net Prospective Resources are stated herein in terms of LEO’s net Working Interest (WI) in the properties and, due to the very
immature nature of these Prospective Resources, have not been computed as net entitlement volumes under the PSA. In this regard
these volumes stated herein will exceed the volumes which will arise to LEO under the terms of the PSA.
2. It is inappropriate to report summed-up Prospective Resource volumes or to otherwise focus upon those of other than the 'Best
Estimate'.
3. The Geologic Chance of Success (GCoS) reported here represents an indicative estimate of the probability that the drilling of this
prospect would result in a discovery which would warrant the re-categorisation of that volume as a Contingent Resource. These GCoS
percentage values have not been arithmetically applied within this assessment.
4. This table of information is a summary compiled by Lion Energy Corp. based on information provided in the report.
Prospective Resources
are those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of future 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 subclassified based on project maturity.
Prospective resources are undiscovered resources that indicate development potential in the event the
discovery is made and is commercial, and they should not be construed as reserves or contingent
resources.
WORK PROGRAM
Puntland (Somalia)
Under the terms of the PSAs for the Nugaal and Dharoor Blocks, the Company and its partners are
required to drill one exploration well in each block during each exploration period. The first
exploration period expires in January 2011 and the second optional three-year exploration period
would be expected to expire in January 2014. During the exploration period on both the Dharoor and
Nugaal Blocks, the Company and its partners are obligated to complete G&G operations (including
geological fieldwork, geochemical surveys, reprocessing seismic). In addition, the Company and its
partners are required to drill one exploration well during each of the two exploration periods, with a
minimum expenditure of $5.0 million during each exploration period. As consideration for farming
into the Dharoor and Nugaal Blocks, Lion has agreed to fund 30% (to a maximum of US$5,100,000)
of the first US$17,000,000 of future JOA costs incurred in drilling one exploration well on each of the
Dharoor and Nugaal Blocks. Lion will be responsible for funding its working interest share of all other
joint operating expenses. The Company and its partners are currently in the planning stage for a two
well drilling program expected to commence in 2010.
Kenya
Under the terms of the Block 9 PSA, with the drilling of the Bogal-1 well, which is currently ongoing,
the Company and its partners have fulfilled and exceeded the minimum work and financial obligations
of the initial exploration period. As consideration for farming into Block 9, Lion has agreed to fund
33.3333% (to a maximum of US$5,000,000) of JOA costs to be incurred by the Farmor, related to
drilling the Bogal-1 well. Lion will be responsible for funding its working interest share of all other
joint operating expenses.
Under the terms of the Block 10A PSC, the initial 4 year exploration period expires in October 2011,
the Company and its partners are obligated to complete G&G operations (including acquisition of 750
kilometres of 2D seismic) with a minimum expenditure of $7.8 million. Additionally, Lion and its
partners are required to drill one exploration well with a minimum expenditure of $8.5 million. As
consideration for farming into Block 10A, Lion has agreed to fund 50% (to a maximum of
US$4,000,000) of future joint operating expenses in the performance of a seismic program. Lion will
be responsible for funding its working interest share of all other joint operating expenses. The
Company and its partners are currently in the planning stage of a 750km 2D seismic program planned
for 2010. An exploration well is planned for 2011.
In accordance with the terms of the Block 10BB PSC, the initial exploration period expires in January
2012, the Company and its partners are obligated to complete G&G operations (including acquisition
of 200 kilometers of 2D seismic and 200 square kilometres of 3D seismic) with a minimum
expenditure of $6.0 million gross . In addition, the Company is required to drill one exploration well
with a minimum expenditure of $6.0 million. As consideration for farming into Block 10BB, Lion has
agreed to fund 40% (to a maximum of US$6,000,000) of future joint operating expenses in the
performance of a seismic program and drilling of one exploration well. Lion will be responsible for
funding its working interest share of all other joint operating expenses. The Company and its partners
are currently in the planning stage of a 600km seismic program planned for 2010. An exploration well
is planned for 201
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