Heavy Oil Extraction Technology Proven Successful at Wilkie Field

Deloro Resources announced that the pilot test of Electro-Petroleum's (EPI) Electrically Enhanced Oil Recovery (EEOR) at the Wilkie field has been successfully completed. The test demonstrated that the EEOR process has been able to improve the API gravity and reduce the viscosity of the crude by approximately 50% (services performed by Husky Oil Marketing Company-Analytical Services Laboratory). Deloro and Electro-Petroleum (EPI) will now proceed with their joint venture to fully develop Wilkie.

For the pilot test, EPI retrofitted an existing horizontal well at the Wilkie site. While analysis of the produced crude showed that the EEOR process was able to upgrade the oil, several issues with the configuration of the existing well limited potential flow rates. Going forward the joint venture will work to address the issues on this particular well, and will proceed with development of new wells custom designed for the EEOR process.

"We were very pleased with the results we saw during the test, especially the ability of EEOR to upgrade the oil by non-thermal means in the reservoir," stated Philip Bell, President and CEO of EPI. "We are looking forward to expanding with the drilling of additional wells specifically designed for our EEOR process and moving toward commercial production at Wilkie."

Deloro Resources reached an agreement with EPI in 2008 to conduct a full pilot test using EPI's EEOR technology on Deloro's heavy oil Wilkie properties. Once the pilot test is deemed successful, the project will proceed to full development and EPI will earn a 10-per-cent working interest in the Wilkie project for the use of its technology. The net profit will initially be divided 50 per cent to Deloro Resources and 50 per cent to EPI until EPI recovers its costs. Then Deloro will receive a 90-per- cent working interest and EPI will have a 10-per-cent working interest. The Deloro 100-per-cent-owned Wilkie project is located eight miles south of Wilkie, Sask. The Wilkie property consists of approximately 3,765 leased acres of petroleum and natural gas rights. These government of Saskatchewan leases cover a channel in the McLaren zone that is one-half to three- quarters of a mile wide and approximately five miles long. The zone is at a depth of 2,035 feet, with five vertical wells and one horizontal well drilled into the structure, defining a heavy oil pay zone with gross sand thickness of 30 feet to 50 feet.

Reliance Engineering Group Ltd. recently completed an independent report in which estimates of discovered resources were performed in accordance with National Instrument 51-101 guidelines and generally accepted industry standards. The discovered resources were calculated based on McLaren sand net pay Isopach maps and the average reservoir parameters. The original discovered resources underneath company land were calculated to be approximately 63.1 million barrels. Shareholders and other interested parties are invited to visit the company website for additional information.

Management of Deloro and EPI have formed a technical committee and a business development committee to advise on the immediate development of the Wilkie heavy oil project.


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