Bow Valley Energy Ltd. announces first oil production from Chestnut field development, U.K. North Sea

Bow Valley Energy Ltd. announces first oil production from Chestnut field development, U.K. North Sea

Bow Valley Energy Ltd. announce that the Chestnut field in the U.K. North Sea commenced oil production on September 20, 2008. Bow Valley Petroleum (UK) Limited, a wholly-owned subsidiary of Bow Valley Energy Ltd., owns a 15.125% working interest in Block 22/2a which contains the Chestnut field.

The Chestnut field is located approximately 180 miles east of Aberdeen in water depth of approximately 120m. Chestnut has been developed using the new Sevan Hummingbird floating production storage and offloading unit (‘FPSO’). The Sevan Hummingbird FPSO has a capacity to store 270,000 bbls. of oil, an oil processing capacity of 30,000 barrels of oil per day and a water injection capacity of 20,000 barrels per day.

The joint venture group has developed the field with one horizontal oil production well and one vertical water injection well. Initial production volumes are expected to average approximately 10,000 (1,500 net) barrels of oil per day. The joint venture group is also currently drilling an additional appraisal/development well, which if successful, will add to the field’s productive capacity and booked reserves.

Chestnut oil sales volumes will be offloaded and transported by shuttle tanker.

R.G. Moffat, President and CEO of Bow Valley, said: “We are pleased to have reached this very important milestone for the Company. The Chestnut field development represents the fourth such project that Bow Valley has successfully completed in the UK North Sea. The Chestnut field development, combined with our other producing properties at Kyle, Blane and Enoch will result in a significant increase in production, revenue and cash flow. Additional production is also forecast from the field development at Ettrick, and two pre-sanction field developments at Peik and Blackbird. The success at Chestnut is further confirmation of our business plan and ability to execute on all of our ambitious projects.”

Bow Valley Energy Ltd. is an international oil and natural gas exploration, development and production company with operations in the U.K. sector of the North Sea and Alaska. The common shares of the Company trade on the Toronto Stock Exchange under the symbol BVX.

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