Highpine: Alberta's Royalty Plans 'Require Clarification'

Highpine Oil & Gas issued the following statement regarding the Alberta Government New Deep Resources Programs.

"We are pleased the Government of Alberta has acknowledged the glaring need to address the unintended consequences of the New Royalty Framework (NRF) for deep sour oil and deep gas exploration in this province," the company stated in a press release. "However, the royalty holidays and credit programs fail to address all issues inherent in the fundamentally flawed NRF curves.

"As a 100% Alberta based company, Highpine remains committed to continue to work with the government of Alberta -- both individually and through industry associations -- to rectify the confiscatory aspect of the NRF on companies with high rate wells.

Highpine stated that it has no plans to reduce its 2008 drilling program based on the changes to the government's policy. "Planning and investment decisions were based on the assumption of full implementation of the NRF proposed October 2007," Highpine stated. "Some details of the new deep resource programs require clarification.

"The Deep Oil Exploration Program (DOEP) announced April 10, 2008, will apply to all future exploratory oil wells on the Pembina Nisku Fairway. The DOEP increases Highpine's rate-of-return by approximately 20% on successful exploratory oil wells. Many of our future gas wells will also attract a royalty credit under the Natural Gas Deep drilling Program, further improving their economics."