Oil and Gas Properties

Pine Cliff's only producing property is located in the Sundance area of West Central Alberta. The Company has a 13.7 percent average working interest in 4,960 acres (681 net acres) of Crown land in the area. There are currently ten gross (1.28 net) wells producing. The wells are producing liquid rich natural gas from multiple Cretaceous sands ranging from the Cadomin to the Belly River. Current production from the ten wells is exceeding 11 MMCF per day gross (1,600 MCF per day net to Pine Cliff). NGLs are produced in association with the natural gas.

There continues to be significant industry activity in the area and the operator for this area continues to monitor and evaluate the undeveloped lands for additional development. The lands have been approved for a holding which allows for the drilling of eight wells per section on approximately 60 percent of Pine Cliff’s lands. Pine Cliff participated in the drilling and completion of two wells in 2009 and two wells in the first quarter of 2010, all of which are on production as of April 1, 2010. Production from these new wells is exceeding 1,400 MCF per day net to Pine Cliff.

Facilities

Pine Cliff has a working interest in all well site facilities, field compression and pipelines that are required to produce its wells into third party owned and operated gathering systems and natural gas processing plants.

Properties with No Attributable Reserves

The Company has the following two properties located in the country of Argentina. None of the rights to explore, develop or exploit any of the following unproved properties will expire within one year.

Canadon Ramirez Farm-In, Argentina

The Company through its 93 percent owned subsidiary, CanAmericas Energy Ltd. (CanAmericas) earned a 49 percent interest in 47,940 gross acres (23,490 net acres) of an exploitation concession situated in the western part of the San Jorge Basin by funding 100 percent of exploration costs totaling U.S. $5,500,000, including a 21 percent Value Added Tax (V.A.T.). The commitment, that is now complete, included conducting a 190 square kilometer 3D seismic program and spending the remainder of the funds on drilling, completing and testing of the three exploration wells.

The drilling, completion and testing of the three exploration wells was completed and even though cuttings openhole logs and side wall core evaluations were encouraging and indicated the presence of hydrocarbons all zones tested were determined to be uneconomic. As a result of the unsuccessful drilling program, less prospective lands were relinquished reducing the size of the concession to 6,206 gross acres (3,020 net acres).

The acreage is bordered by several producing oil fields. Over 40 separate prospective reservoirs belonging to the Upper-Mid Cretaceous-aged Bajo Barreal and Castillo Formations are known to exist within the farm in area at depths between 600 to 1,500 meters. Additionally, Neocomian aged source rocks within the farm in area have been proven to be oil generating and over pressured. The 3D seismic program has identified several other opportunities and the Company is exploring ways to extract additional value from this property.

Laguna de Piedra Farm-In, Argentina

The Company through its 93 percent owned subsidiary, CanAmericas, has earned a 25 percent interest in 252,944 gross acres (63,236 net acres) of the Laguna de Piedra exploration concession operated by Golden Oil by funding 40 percent of a 100 km2 3D seismic program over the northern portion of the property. There are no further commitments required to maintain this concession. The concession is situated on the southeast flank of the prolific Neuquen Basin. The concession is adjacent to the Estacion Fernandex Oro oil field situated to the northwest, and adjacent to Flor de Roca, General Roca, and Don Jose oil fields to the north. These fields collectively produce from the Lower Cretaceous – Jurassic aged Quintuco, Lotena, Los Molles, and Punta Rosada Formations.

Additionally, it is believed that the PreCuyo interval may also have significant potential, as it lies on trend with Chevron’s La Yassera and Loma Negra fields, and is in a similar deposition setting as Petrolifera’s recent Puesto Morales Field discoveries. Expected target depths range from 500 to 2,200 meters. To date there have been no wells drilled on the block. Plans to drill one gross (0.25 net) exploration well on the property have been delayed by regulatory issues which the operator of the property is negotiating to resolve. The outcome of these negotiations is uncertain at this time.

More detailed information may be found in the prospectus on the financial section of this website.