Quarry Completes Winter Drilling Campaign in Canada

Assure Energy's subsidiary, Quarry Oil & Gas Ltd, has completed its Fall-Winter 2003 Multi Well Drilling Program in Canada's Western Sedimentary Basin.

Quarry focused its exploration and development efforts on two principal areas of interest, the Rigel area of British Columbia and the Ribstone area of Alberta. The program comprised drilling 6 new locations, 5 new oil wells in Ribstone and 1 new gas well in Rigel and completing 2 wells drilled in the prior season, 1 oil well in Ribstone and 1 gas well in Rigel. To preserve certain lands of Quarry and enhance its reserve base, Quarry farmed out 2 gas test wells in the Currant area of British Columbia to its controlling shareholder Assure, for a prospect fee of $450,000, a commitment to drill the wells, and a convertible gross overriding royalty.

As a result of the 6 new wells drilled by Quarry, 5 new oil wells drilled in Ribstone are completed as producers and the 1 new gas well drilled in Rigel was abandoned. Both of the completion wells have been successfully brought onto production. Assure has drilled the 2 gas wells in the Current area to target depth and both wells are presently being evaluated.

In the Ribstone area Quarry drilled 5 directional oil wells off an existing well lease. Quarry completed the newly drilled 5 wells and also completed a well that was drilled and cased during the prior season. Presently all 6 wells are pumping oil at a combined production averaging 14.1 m3/day (88.7 bbls/day) from the Sparky, GP, and Lloyd formations. Quarry management is undergoing evaluations to either re-complete one well as a water injection well or drill a water injection well to increase flow rates and optimize production. Reserves from the 6 well pad are estimated by Quarry's independent engineers at 163,000 barrels recoverable of which Quarry holds a 100% working interest.

The completed gas well in the Rigel area is presently producing from the Dunlevy at an average 530mcf/day or (198 mcf/day net) and 7 bbls/day (2.5 bbls/day net) of associated natural gas liquids which has leveled off from its initial production rate of 2.5 mmcf/day in a normal decline curve associated with this structure. Quarry has a 37.5% working interest before payout, (12.5% interest after payout) in this well.

Quarry exited the year ending December 31, 2003 with 979 boe/d of production, of which approximately 33% is produced from 7 gas wells and 67% is produced from approximately 48 oil wells.

Assure Energy holds a 48.5% stake in Quarry Oil & Gas.
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