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Calvalley Petroleum Inc., (TSX: CVI.A) provides 2012 reserves update

Wednesday, Feb 20, 2013

CALGARY, Feb. 19, 2013 /CNW/ - Calvalley Petroleum Inc. ("Calvalley" or the "Company") announces the results of its December 31, 2012 reserves evaluation.

The reserve evaluation was conducted by McDaniel & Associates Consultants Ltd. who prepared an independent engineering evaluation of the reserves attributable to the Company's 50% working interest in Block 9 in a report dated February 13, 2013 with an effective date of December 31, 2012 (the "McDaniel Report") in accordance with National Instrument 51 101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101") and the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook").

Drilling activity in 2013 included the drilling of two delineation wells at Ras Nowmah and a water injection well at Hiswah. Drilling activity was restricted by security and local issues.

The restricted level of drilling activity is reflected in the reserve evaluation in two ways - limited reserve replacement, and continuing deferment of projects related to the undeveloped reserve potential in the Block impacting the timing of cash flows and net asset values.

Early in 2013 the company achieved a cumulative production milestone of one million barrels from the Ras Nowmah field.

Company interest proved reserves of crude oil of 12.5 million barrels declined from 14.7 million barrels in 2011. Similarly company interest proved plus probable reserves of crude oil of 25.2 million barrels declined from 29.3 million barrels in 2011.

The gross estimate of total proved plus probable original oil in place for Block 9 of 317 million barrels is slightly lower than the estimate of 331 million barrels in 2011 due mainly to a technical revision of reserves in the Ras Nowmah field. The definition of the Ras Nowmah structure was updated by the current year drilling activity. The Ras Nowmah structure is still open in the north-west direction and will be evaluated by drilling in 2013.

The company interest future development costs included in the evaluation of proved reserves is US$56 million and for proved plus probable reserves is US$96 million.

SOURCE Calvalley Petroleum Inc.

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