Blizzard Energy Closes Property Acquisition in Canada

Blizzard Energy has successfully closed the acquisition and farm-in transaction announced on December 7, 2004. Blizzard entered into an agreement with a senior Canadian oil and gas production company (the "Vendor") to acquire certain oil and natural gas producing properties, related production facilities and undeveloped land for $63.0 million. These properties are currently producing approximately 1,300 boepd, which includes 4.8 mmcfpd of natural gas and 500 bpd of oil and natural gas liquids. Based on Blizzard's internal reserve estimates, the properties being acquired contain proved reserves of 10.3 bcf of natural gas and 756,000 barrels of oil and natural gas liquid reserves. Blizzard will also acquire approximately 92,000 gross acres (65,000 net) of undeveloped land in the Grande Prairie area and another 180,000 acres (gross and net) of undeveloped land in the Sousa, Alberta area. The effective date of the acquisition is November 30, 2004.

In connection with the property acquisition, Blizzard entered into a farm-in agreement with the Vendor in respect of properties in the North Eastern area of British Columbia. Under the terms of the farm-in agreement, Blizzard has committed to invest a minimum of $16.0 million on exploration and development activities by April 30, 2005. Blizzard will have access to 168,000 acres of option land and will pay 80% of exploration expenditures to earn a 50% working interest from the Vendor. Blizzard will have the option to commit on or before August 31, 2005, up to an additional $20 million in earning drilling expenditures on or before April 30, 2006 on the farm-in lands.

Concurrent with the transaction, Blizzard has entered into a new credit facility with its banker, which provides for borrowing capacity up to $60 million.

Finally, Blizzard has renegotiated the joint venture relationship it announced in an earlier press release dated August 20, 2004. Blizzard has released the exploration company from this obligation and has instead, sold the working interest in the mineral rights that this company would have earned through the participation and farm-out agreement for $3.5 million.

Blizzard's common shares are listed on the Toronto Stock Exchange under the symbol BZZ. Blizzard is an Alberta-based energy company engaged in the exploration for, development and production of crude oil and natural gas in the Western Sedimentary Basin.
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