CR Crew Energy Inc

Crew Energy Inc. (TSX:CR) 

OPERATIONS UPDATE

Crew Energy Inc. ("Crew" or the "Company") had a very active fourth quarter of
2010, drilling 21 (19.75 net) wells with a 95% success rate. During 2010, Crew
drilled a total of 80 (75.15 net) wells with a success rate of 99%. This program
resulted in 56 (54.8 net) oil wells, 15 (11.35 net) gas wells, eight (8.0 net)
service wells and one (1.0 net) dry and abandoned well. Crew exited 2010
producing approximately 17,650 boe per day, based on field estimates. Fourth
quarter production averaged approximately 14,550 boe per day, based on field
estimates, representing an 11% increase over the third quarter of 2010. This
production level was achieved despite a delay in the completion of the Company's
gas plant expansion at Septimus, British Columbia which limited production from
the area to the existing 25 mmcf per day capacity of the plant. The Septimus
production was offset by increased oil volumes from the Company's Princess,
Alberta property in order to achieve the Company's forecasted corporate exit
rate.


At Princess, Crew increased production throughout the quarter exiting the year
at approximately 8,000 boe per day, which is at the top end of the Company's
guidance. The Company drilled 18 (18.0 net) oil wells in the area in the fourth
quarter. Initial production rates continue to increase as the 11 (11.0 net)
wells that were placed on production in December have current average production
per well of 311 boe per day and remain to be fully optimized. To continue
capitalizing on the drilling momentum and improving results at Princess, the
Company increased its fourth quarter capital program by spudding an additional
five wells in December and expanding the area infrastructure to handle the
increasing fluid rates.


At Septimus, the Company drilled one (1.0 net) horizontal Montney well and
completed three (3.0 net) wells. Average first month production from these three
wells is above the current type curve producing an average rate per well of 5.7
mmcf per day (1,030 boe per day) of liquids rich natural gas at high flowing
pressures. The production from these wells has allowed the Company to shut in
existing producing wells until the Septimus gas plant expansion is complete in
order to accommodate these additional production volumes. Crew has completed its
earning at Portage, British Columbia and now controls 50% of 64 (32 net)
sections of land. The Company has drilled and tested two (1.0 net) horizontal
wells at Portage at rates of 1.2 to 4.4 mmcf per day at low flowing pressures. 


The Company also participated in a partner operated horizontal well (0.25 net)
targeting the Falher formation at Kakwa, Alberta. This well flowed at a test
rate of 12.9 mmcf per day at high flowing pressures and is expected to be tied
in during the first quarter of 2011. Crew has five (1.25 net) drilling locations
on three (0.75 net) prospective sections on this play.


2011 OUTLOOK

The Board of Directors of Crew has approved a 2011 capital budget for the
Company of $210 million which includes drilling of 112 net wells with the
majority of these wells being drilled at the Company's core oil property at
Princess, Alberta. This program is expected to be adequately financed through a
combination of cash flow and the Company's expanding bank facility. The 2011
production rate is expected to average between 18,000 and 19,000 boe per day
(52% oil and ngl) which at the mid point is an increase of greater than 35% over
the estimated 2010 average. 


At Princess, 107 (107.0 net) wells are planned which include 68 (68.0 net)
horizontal wells, 20 (20.0 net) vertical wells targeting oil, and 19 (19.0 net)
service wells. Princess production is expected to exit the year at approximately
12,000 boe per day. An attractive characteristic of the Pekisko reservoir at
Princess is that it does not require fracture stimulation. This allows Crew to
more effectively control the timing and costs which, recently, has been
challenging in North America due to the shortage and rising costs of fracture
pumping services. In addition, significant capital is budgeted for a major
pipeline and facility expansion to accommodate future production growth. 


At Septimus, a minimum of five horizontal wells are planned with production
expected to reach 6,000 boe per day during 2011. The Company's previously
announced expansion of the Septimus gas processing facility is nearing
completion with expected commissioning in early February, 2011. 


The accelerated development of Crew's oil play at Princess continues to expand
and exhibit exceptional well and production growth. We look forward to
continuing this momentum into 2011 and reporting additional 2010 results later
in the quarter.


CAUTIONARY STATEMENTS

Forward-looking information and statements

This news release contains certain forward-looking information and statements
within the meaning of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue", "estimate", "may", "will", "project",
"should", "believe", "plans", "intends" and similar expressions are intended to
identify forward-looking information or statements. In particular, but without
limiting the forgoing, this news release contains forward-looking information
and statements pertaining to the following: the Company's planned capital
expenditure program, drilling plans, estimated and expected production levels;
the volume and product mix of Crew's oil and gas production; future results from
operations; future development and exploration activities and related capital
expenditures and adequacy of anticipated methods of financing; the number of
wells to be drilled and completed and related production expectations; the
amount and timing of capital projects; and the expansion of the Septimus
facility and timing thereof. 


The forward-looking information and statements included in this news release are
not guarantees of future performance and should not be unduly relied upon. Such
information and statement, including the assumptions made in respect thereof,
involve known and unknown risks, uncertainties and other factors that may cause
actual results or events to defer materially from those anticipated in such
forward-looking information or statements including, without limitation: changes
in commodity prices; changes in the demand for or supply of Crew's products;
unanticipated operating results or production declines; changes in tax or
environmental laws, royalty rates or other regulatory matters; changes in
development plans of Crew or by third party operators of Crew's properties,
increased debt levels or debt service requirements; inaccurate estimation of
Crew's oil and gas reserve and resource volumes; limited, unfavourable or a lack
of access to capital markets; increased costs; a lack of adequate insurance
coverage; the impact of competitors; and certain other risks detailed from
time-to-time in Crew's public disclosure documents, (including, without
limitation, those risks identified in this news release and Crew's Annual
Information Form).


The forward-looking information and statements contained in this news release
speak only as of the date of this news release, and Crew does not assume any
obligation to publicly update or revise any of the included forward-looking
statements or information, whether as a result of new information, future events
or otherwise, except as may be required by applicable securities laws.


BOE equivalent

Barrel of oil equivalents or BOEs may be misleading, particularly if used in
isolation. A BOE conversion ratio of 6 mcf: 1 bbl is based on an energy
equivalency conversion method primarily applicable at the burner tip and does
not represent a value equivalency at the wellhead.


Crew is a Calgary, Alberta based oil and gas exploration, development and
production company whose shares are traded on The Toronto Stock Exchange under
the trading symbol "CR".

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