Mr. Dean Callaway reports

SONORO ENERGY LTD. FIRST OIL SALES FROM SASKATCHEWAN WELL

Sonoro Energy Ltd.'s first oil sales have been completed in Saskatchewan from its 14-29 well. Sonoro has two storage tanks totalling 2,000 barrels at the 14-29 location. The tanks were close to full with product typically associated with the early production phase from the process known as CHOPS (cold heavy oil production with sand production). The storage tanks have been emptied and production continues to ramp up consistent with CHOPS heavy oil production typical in the area. Daily production volumes have been increasing and Sonoro will define the production profile when it stabilizes. CHOPS production in the area is characterize as follows.

Cold heavy oil production with sand (CHOPS) involves the deliberate initiation of sand influx during the completion procedure, maintenance of sand influx during the productive life of the well and implementation of methods to separate the sand from the oil for disposal. A liner with a small open hole was used to maintain hole stability while still encouraging sand worm holing. The sand is produced along with oil, water and gas and separated from the oil before upgrading to a synthetic crude.

CHOPS wells display wide variations in their production histories. CHOPS production depends on the range of factors discussed in CHOPS production rate increase mechanisms, CHOPS physical mechanisms, and CHOPS operational and monitoring issues; however, the major aspects of a typical CHOPS well include the following factors:

• When a new well is completed, initial sand influx is large: 10 to 40 per cent of the volume of the (gas-free) produced liquids and solids.
• Over a period of a few days to several months, the sand rate gradually decays toward a steady-state influx rate (0.5 to 10 per cent), depending on oil viscosity.
• The oil production rate increases to a maximum several months or more after placing the well on production and then slowly declines as reservoir depletion effects begin to dominate.
• All CHOPS production is accompanied by substantial gas production, and gas/oil ratio values tend to remain relatively consistent over many years.
• Short-term sand influx rates and oil production rates fluctuate chaotically about the mean value.

Sonoro is pleased with how the well has performed to date and is analyzing the well results with its partners, further interpreting the seismic data and assessing other key data points for selecting and executing on the next drilling location in Saskatchewan. Sonoro is closely monitoring when spring break-up will occur this year, which is difficult given the unusual weather patterns in the area to date. Spring break-and the period associated with it, prohibits heavy road use and drilling activities in the area and typically runs between mid-March into May.

We seek Safe Harbor.