Cloudbreak Resources Ltd.is pleased to announce an independent NI 51-101 compliant upgrade of its J5 parcel from the category of prospective resources to probable and possible reserves. Based on favourable reservoir parameters, Chapman Petroleum Engineering Ltd. of Calgary, Alberta, has estimated a total of 214,000 bbl probable plus possible reserves of 30 degree API oil in the Viking sandstone. This includes 71,000 bbl in the probable category, and 143,000 bbl in the possible category that could be developed by three short vertical and/or horizontal wells. Seismic interpretation that is currently underway has the potential to further upgrade or increase these reserves. These reserves were identified as a result of detailed geological studies focused on identifying specific drill targets on Cloudbreak's 100% owned oil and gas leases, as part of its ongoing exploration and development program.

The Viking reservoir is locally thick under all of Parcel J5, and occurs at a shallow depth. A suspended Viking oil well in the middle of the property was drilled in 1965 and flowed 35.22 bpd on a limited production test, but was never developed. This is an unusually strong flow rate for a vertical well in the Viking, and the undeveloped reservoir remains intact and undepleted.

We are also very encouraged by the presence of potential pay zones in the underlying Bakken sand. The Bakken is thick and is a prolific producer in the immediate area. It is located only 140 m below the Viking, and can be tested for a minimal extra cost. An independent NI 51-101 study by Chapman Petroleum Engineering Ltd. has already assigned a prospective resource to the Bakken zone on this property that is documented in Cloudbreak's News Release of July 15, 2010, and a successful Bakken test would upgrade this prospective resource to reserve status. Cloudbreak looks forward to testing both the Viking and the Bakken as part of its planned program.

Once Chapman's current studies are complete, Cloudbreak is planning a program to test the Viking and Bakken targets on Parcel J5, upgrade the reserve estimate, and build a solid production base and cash flow for the company. Concurrent studies by Chapman are underway to generate specific drill targets across all of Cloudbreak's oil assets, in preparation for executing a program to exploit the full potential of these assets and maximize shareholder value with the new oil division. Management will release this information as it becomes available.

Source: Marketwire

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