APEC Secures Oil Sands Recovery License

Alaska Pacific Energy has executed an Oil Sands Licensing Agreement between APEC and Engineering Technology.

Pursuant to the Agreement, Entec has granted APEC and any affiliates a non exclusive, non transferable, non sub-licensable, royalty free, fully paid-up license to use Entec's North American License rights to Entec's Horizontal Directional Drilling Oil Sands Recovery Solutions for any oil sands recovery activities in which APEC is now or hereafter engaged. For this exclusive North America License, APEC will issue 15,000,000 restricted common shares to Entec. The shares are restricted against resale pursuant the rules of the United States Securities and Exchange Act.

As a result of its involvement with Entec, Alaska Pacific Energy has recognized that the key to developing enhanced oil sands production lies in the development of an overall recovery system. Ultimately the further development of drilling and heating enhancement systems could unlock trapped oil, enhance the current drill and refine processes to create a commercial opportunity in the recovery of unconventional hydrocarbon reserves such as the Alberta oil sands, and market the solution domestically and abroad.

The key to unlocking this potential 'trapped' oil revolves around the capability to develop the heating and recovery mechanisms along with the ability to develop drilling solutions to maximize their effectiveness. Currently, efforts have been made to develop enhanced heating and stimulation systems that can compliment (or potentially' stand alone) the current steam injection.

The oil is locked into a mixture of sand, clay and water and is currently' recovered through a mine and refine process as well as a drill and refine process. This mixture is generally found at ground surface and slants downward to depths of beyond 500 meters. Essentially mined oil sands are heated to separate the mixture and drilled processes inject steam into the ground to help separate the mixture.

Current limits allow for oil sands mining capability to approximately 90 meters in depth. This is due primarily to the technical and economic restraints of open pit mining beyond these depths. Drill and refine processes are typically installed at depths of approximately 500 meters. This is primarily due to the technical restraints of using pressurized steam at depths closer to the ground surface yet beyond the reach of open pit mining.

The oil bearing sand mixture in the region between the limits of mining and the beginning of current drill and refine processes (90-500m) is not being commercially exploited on a significant scale. Vast portions of the oil contained in the oil sands lies at these depths. It is estimated by the industry that approximately 90 percent of the total oil in place is beyond a mining operation and will need to be recovered in place. Horizontal Drilling and stimulation is the currently preferred method of recovering that oil. The continuing development of technical drilling and stimulation solutions holds promise for all participants in the area

Jim King, president and CEO of APEC, stressed the importance of the license acquisition to the Company, "APEC's acquisition of Entec's unique Horizontal Directional Drilling Oil Sands Recovery Solutions License places APEC in the forefront of oil sands recovery in North America."