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Press release from CNW Group


Thursday, June 30, 2011

CALVALLEY PETROLEUM INC. - OPERATIONS AND STRATEGY UPDATE08:00 EDT Thursday, June 30, 2011CALGARY, June 30, 2011 /CNW/ - Calvalley Petroleum Inc. (TSX: CVI.A)Calvalley Petroleum Inc. ("Calvalley" or the "Company") provides the following update for shareholders.Given the Company's strong financial position and the current geopolitical situation in its Yemen core area, the Company is focusing on both organic growth in Yemen and growth through potential acquisitions in order to expand and diversify its production base.Recent events in Yemen have resulted in challenges to the Company's operations in the area. Management has responded to these challenges by developing new marketing arrangements and working with local and government officials to ensure plans for growth in production capability continue to progress.During the second quarter production operations continued at restricted levels to build inventory volumes both at the Company's Central Processing Facility ("CPF") and at the Nexen operated export terminal. Calvalley's crude oil purchaser was unable to lift crude oil from the Red Sea terminal in the second quarter due to a pipeline disruption.The Company has recently started delivering crude oil blended from the Hiswah and Ras Nowmah fields into inventory at the Nexen operated Masila Export Pipeline System ("MEPS") through the Company's recently completed Truck Offloading Facility.The Company is also in the process of finalizing a term marketing agreement to undertake crude oil sales of its Malik Blend production. Deliveries of crude oil under these marketing arrangements are anticipated to begin a regular pattern of future crude oil liftings during the third quarter.To optimize the production potential of its current wells, Calvalley is planning to install new facilities at the Company's CPF to ensure the crude oil quality meets the delivery specifications at the Nexen export facility.The Company strongly believes that the underlying asset quality of the current Yemen assets has potential for significant growth in shareholder value.Calvalley is an international oil and gas company, with offices in Calgary, Alberta, Canada, that operates its 50% working interest in Block 9 of the Masila Basin, in The Republic of Yemen and its 100% working interest in the Gimbi and Metema Blocks of the Blue Nile Basin, in The Republic of Ethiopia.THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.This press release may contain forward-looking statements including, without limitation, financial and business prospects and financial outlooks, and such statements may be forward-looking statements which reflect management's expectations regarding future plans and intentions, growth, results of operations, performance and business prospects and opportunities. Words such as "may", "will", "should", "could", "anticipate", "believe", "expect", "intend", "plan", "potential", "continue", and similar expressions have been used to identify these forward-looking statements. These statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve significant risk and uncertainties. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements including, but not limited to, changes in general economic and market conditions and other risk factors. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, management cannot assure that actual results will be consistent with these forward-looking statements. Investors should not place undue reliance on forward-looking statements. Forward-looking statements and other information contained herein concerning the oil and gas industry and Calvalley's general expectations concerning this industry are based on estimates prepared by management using data from publicly available industry sources as well as from reserve reports, market research and industry analysis and on assumptions based on data and knowledge of this industry which Calvalley believes to be reasonable. However, this data is inherently imprecise, although generally indicative of relative market positions, market shares and performance characteristics. While Calvalley is not aware of any misstatements regarding any industry data presented herein, the industry involves risks and uncertainties and is subject to change based on various factors.For further information: or +1 (403) 297-0490 Edmund Shimoon, Chairman and CEO Gerry Elms, CFO