BlackRock Begins Summer Drilling Program at Seal

BlackRock Ventures has started its 2004 development drilling program at Seal in Alberta, Canada. The Company has contracted two drilling rigs and plans to drill 40 horizontal wells during the second half of 2004. The majority of these wells will continue the Seal Central block development, but the program will also involve the initial development of the Eastern block later in the year.

In conjunction with this drilling program, the Company has begun the expansion of the Seal heavy oil battery, which will result in processing capacity increasing from 10,000 barrels per day to 15,000 barrels per day. The expansion is expected to be completed in the fourth quarter of 2004. BlackRock has a 50% interest in the facility.

The Seal heavy oil pipeline, which was completed in April, three months ahead of schedule, continues to be optimized and will be fully operational in August, when a 125,000 barrel sales tank is completed. Due to limited temporary sales tank capacity, production from the Seal area was restricted to approximately 2,500 barrels of oil per day in the second quarter (net to BlackRock). However, as a result of improved handling procedures at the sales point, we have been able to increase recent production to approximately 4,000 barrels per day (net to BlackRock).

In June, BlackRock drilled and cased five wells in the Lloydminster area. These wells will be completed and placed on production in July. A follow up drilling program is scheduled for September.

A regulatory hearing for the 20,000 barrel per day commercial development application of our Hilda Lake SAGD project is currently underway. A decision by the Alberta Energy and Utilities Board is expected in the fall.

Total current production for the Company is approximately 6,000 barrels per day and we expect to exit 2004 at 10,000 barrels per day as a result of the horizontal well drilling program at Seal.