Dejour Flows First Natural Gas From Peace River Arch

Peace River Arch
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Dejour Enterprises Ltd. announced the completion of its winter exploration program resulting in the initiation of natural gas production from its operations in the Peace River Arch project area of northeastern BC.

In Q1-08 Dejour made significant progress transitioning from an exploration to a production oil and gas company. Highlights include: 11 new wells drilled in the Peace River Arch area targeted to produce 8-10 mmcfe/day natural gas; testing to date of Q1 Peace River Arch discoveries and development wells resulting in over 10 mmcfe/day test flow rates with testing and evaluation to be completed on three of the wells in Q2; prepared and filed National Instrument 51-101 for Canadian Proven and Probable Reserves (as of 12/31/07); and prepared and filed National Instrument 51-101 for US proven and probable reserves (as of 12/31/07).

The first four gas wells, two of which were drilled in March and April of 2007, at the Company’s Drake area have now been equipped and tied into sales lines. Initial production will be phased in over the next week to a planned rate of 2.5 million cubic feet per sweet natural gas per day, as previously announced for these wells.

Following the lifting of road bans which affect this area every spring, Dejour expects to complete equipping and tie-in of the balance of its production by early Q3-08. With the setting of initial allowable production rate limits placed on some wells by Provincial governments, Dejour now expects that its production volumes may be initially restricted to 8 million cubic feet of natural gas equivalent per day. Additional development, coupled with an established production history, will allow application for higher well flow rates as established by previous production flow tests. Production is forecast to be 80% gas and 20% oil, within the restriction of current allowable government production rates.

Plans for further development of these and other projects are now being formulated, targeting a minimum 8-12 additional wells (both exploration and development) for the winter drilling season of 2008-09.

Some of the operational objectives Dejour will be targeting in Q2 and Q3 are increasing production from the Peace River Arch, updating proven and probable reserves from the new Peace River Arch winter exploration program discoveries, completion and tie-in of the Piceance Basin Barcus Creek #1-12 and #2-12 wells, rationalizing the Company's Piceance-Uintah E&P strategy, and eliminating operational burn rate.


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